Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2022 | |
Document and Entity Information [Abstract] | |
Document Type | S-1 |
Amendment Description | AMENDMENT NO. 1 |
Entity Registrant Name | iSpecimen Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Amendment Flag | true |
Entity Central Index Key | 0001558569 |
BALANCE SHEETS
BALANCE SHEETS | Dec. 31, 2020USD ($) |
Current assets: | |
Cash | $ 695,909 |
Accounts receivable - unbilled | 652,761 |
Accounts receivable, net of allowance for doubtful accounts of $269,170 and $108,096 at December 31, 2021 and December 31, 2020, respectively | 1,526,392 |
Prepaid expenses and other current assets | 417,929 |
Tax credit receivable, current portion | 179,376 |
Total current assets | 3,472,367 |
Property and equipment, net | 75,589 |
Internally developed software, net | 2,634,139 |
Security deposits | 27,601 |
Total assets | 6,209,696 |
Current liabilities: | |
Accounts payable | 1,792,432 |
Accrued expenses | 810,910 |
Accrued interest | 3,696,944 |
Convertible notes payable, related parties, net of unamortized debt discount and debt issuance costs | 5,490,811 |
Derivative liability for embedded conversion features on convertible notes payable | 2,373,000 |
Bridge notes payable, net of debt issuance costs | 4,589,228 |
Bridge notes payable, related parties | 1,905,000 |
Note payable, current portion | 604,109 |
Deferred revenue | 873,254 |
Total current liabilities | 22,135,688 |
Note payable, net of current portion | 178,899 |
Total liabilities | 22,314,587 |
Total convertible preferred stock | 11,173,076 |
Stockholders' equity (deficit) | |
Common stock, $0.0001 par value, 200,000,000 shares authorized, 8,764,479 issued, and 8,733,479 outstanding at December 31, 2021, and 16,000,000 shares authorized, 967,213 issued and 936,213 outstanding at December 31, 2020 | 94 |
Additional paid-in capital | 1,779,698 |
Treasury stock, 31,000 shares at December 31, 2021 and December 31, 2020, at cost | (172) |
Accumulated deficit | (29,057,587) |
Total stockholders' equity | (27,277,967) |
Total liabilities and stockholders' equity | 6,209,696 |
Series B Convertible Preferred Stock | |
Current liabilities: | |
Total convertible preferred stock | 7,999,997 |
Series A-1 Convertible Preferred Stock | |
Current liabilities: | |
Total convertible preferred stock | 561,041 |
Series A Convertible Preferred Stock | |
Current liabilities: | |
Total convertible preferred stock | $ 2,612,038 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts | $ 269,170 | $ 108,096 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 16,000,000 |
Common stock, issued (in shares) | 8,764,479 | 967,213 |
Common stock, outstanding (in shares) | 8,733,479 | 936,213 |
Treasury Stock, Shares | 31,000 | 31,000 |
Series B Convertible Preferred Stock | ||
Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Temporary Equity, Shares Authorized | 3,200,000 | 3,200,000 |
Temporary Equity, Shares Issued | 0 | 572,465 |
Temporary Equity, Shares Outstanding | 0 | 572,465 |
Series A-1 Convertible Preferred Stock | ||
Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Temporary Equity, Shares Authorized | 556,550 | 556,550 |
Temporary Equity, Shares Issued | 0 | 100,365 |
Temporary Equity, Shares Outstanding | 0 | 100,365 |
Series A Convertible Preferred Stock | ||
Temporary Equity, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 |
Temporary Equity, Shares Authorized | 3,427,871 | 3,427,871 |
Temporary Equity, Shares Issued | 0 | 618,182 |
Temporary Equity, Shares Outstanding | 0 | 618,182 |
STATEMENTS OF OPERATIONS
STATEMENTS OF OPERATIONS | 12 Months Ended |
Dec. 31, 2021USD ($)$ / sharesshares | |
CONDENSED STATEMENTS OF OPERATIONS | |
Revenue | $ 11,135,303 |
Operating expenses: | |
Cost of revenue | 5,249,013 |
Technology | 1,837,882 |
Sales and marketing | 2,422,743 |
Supply development | 573,913 |
Fulfillment | 1,363,522 |
General and administrative | 5,613,476 |
Total operating expenses | 17,060,549 |
Loss from operations | (5,925,246) |
Other expense, net | |
Interest expense | (2,102,681) |
Change in fair value of derivative liability on convertible notes | (271,000) |
Change in fair value of derivative liability on bridge notes and bridge notes, related parties | 1,582,700 |
Loss on extinguishment of bridge notes and bridge notes, related parties | (2,740,425) |
Loss on extinguishment of convertible notes and convertible notes, related parties | (260,185) |
Gain on extinguishment of note payable | 788,156 |
Other expense, net | (44,531) |
Interest income | 11,397 |
Other expense, net | (3,036,569) |
Net loss | $ (8,961,815) |
Net loss per share | |
Basic (in dollars per share) | $ / shares | $ (2.09) |
Diluted (in dollars per share) | $ / shares | $ (2.09) |
Weighted average shares of common stock outstanding | |
Basic (in shares) | shares | 4,287,424 |
Diluted (in shares) | shares | 4,287,424 |
STATEMENTS OF CHANGES IN CONVER
STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Preferred StockSeries B Convertible Preferred Stock | Preferred StockSeries A-1 Convertible Preferred Stock | Preferred StockSeries A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series A-1 Convertible Preferred Stock | Series A Convertible Preferred Stock | Total |
Balance at the beginning (in shares) at Dec. 31, 2019 | 572,465 | 100,365 | 618,182 | ||||||||
Balance at the beginning at Dec. 31, 2019 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | ||||||||
Balances at the end (in shares) at Dec. 31, 2020 | 572,465 | 100,365 | 618,182 | 572,465 | 100,365 | 618,182 | |||||
Balances at the end at Dec. 31, 2020 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | $ 11,173,076 | ||||
Balance at the beginning (in shares) at Dec. 31, 2019 | 936,213 | 31,000 | |||||||||
Balance at the beginning at Dec. 31, 2019 | $ 94 | $ (172) | $ 1,686,832 | $ (24,405,503) | (22,718,749) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | 92,866 | 92,866 | |||||||||
Net loss | (4,652,084) | (4,652,084) | |||||||||
Balance at the end (in shares) at Dec. 31, 2020 | 936,213 | 31,000 | |||||||||
Balance at the end at Dec. 31, 2020 | $ 94 | $ (172) | 1,779,698 | (29,057,587) | (27,277,967) | ||||||
Balances at the end (in shares) at Mar. 31, 2021 | 572,465 | 100,365 | 618,182 | ||||||||
Balances at the end at Mar. 31, 2021 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | 22,036 | 22,036 | |||||||||
Net loss | (3,963,491) | (3,963,491) | |||||||||
Balance at the end (in shares) at Mar. 31, 2021 | 936,213 | 31,000 | |||||||||
Balance at the end at Mar. 31, 2021 | $ 94 | $ (172) | 1,801,734 | (33,021,078) | (31,219,422) | ||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | 572,465 | 100,365 | 618,182 | 572,465 | 100,365 | 618,182 | |||||
Balance at the beginning at Dec. 31, 2020 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | 11,173,076 | ||||
Convertible preferred Stock | |||||||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering | $ (7,999,997) | $ (561,041) | $ (2,612,038) | ||||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering (in shares) | (572,465) | (100,365) | (618,182) | ||||||||
Balances at the end (in shares) at Dec. 31, 2021 | 0 | 0 | 0 | ||||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | 936,213 | 31,000 | |||||||||
Balance at the beginning at Dec. 31, 2020 | $ 94 | $ (172) | 1,779,698 | (29,057,587) | (27,277,967) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | $ 4 | 622,060 | 622,064 | ||||||||
Share based compensation expense (shares) | 44,129 | ||||||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering | $ 129 | 11,172,947 | 11,173,076 | ||||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering (in shares) | 1,291,012 | ||||||||||
Conversion of principal and accrued interest of convertible notes and bridge notes into common stock upon initial public offering | $ 205 | 16,392,139 | 16,392,344 | ||||||||
Conversion of principal and accrued interest of convertible notes and bridge notes into common stock upon initial public offering (in shares) | 2,049,043 | ||||||||||
Issuance of common stock in connection with public offering | $ 225 | 17,999,775 | 18,000,000 | ||||||||
Issuance of common stock in connection with public offering (in shares) | 2,250,000 | ||||||||||
Offering costs in connection with public offering | (2,339,816) | (2,339,816) | |||||||||
Issuance of common stock in connection with public offering over-allotment option exercise | $ 34 | 2,497,467 | 2,497,501 | ||||||||
Issuance of common stock in connection with public offering over-allotment option exercise (in shares) | 337,500 | ||||||||||
Issuance of common stock in connection with private placement | $ 175 | 20,999,813 | 20,999,988 | ||||||||
Issuance of common stock in connection with private placement (in shares) | 1,749,999 | ||||||||||
Transaction costs in connection with private placement | (1,434,999) | (1,434,999) | |||||||||
Issuance of common stock in exchange for services | 12,500 | 12,500 | |||||||||
Issuance of common stock in exchange for services (in shares) | 2,000 | ||||||||||
Issuance of common stock through exercise of stock options | $ 5 | 58,643 | 58,648 | ||||||||
Issuance of common stock through exercise of stock options (in shares) | 55,694 | ||||||||||
Issuance of common stock through exercise of warrants | $ 2 | 990 | 992 | ||||||||
Issuance of common stock through exercise of warrants (in shares) | 17,889 | ||||||||||
Issuance of warrants in connection with debt | 49,072 | 49,072 | |||||||||
Net loss | (8,961,815) | (8,961,815) | |||||||||
Balance at the end (in shares) at Dec. 31, 2021 | 8,733,479 | 31,000 | |||||||||
Balance at the end at Dec. 31, 2021 | $ 873 | $ (172) | 67,810,289 | (38,019,402) | 29,791,588 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | 3,125 | 184,191 | 184,191 | ||||||||
Issuance of common stock through exercise of stock options | $ 8 | 75,269 | $ 75,277 | ||||||||
Issuance of common stock through exercise of stock options (in shares) | 77,679 | 77,679 | |||||||||
Net loss | (2,383,742) | $ (2,383,742) | |||||||||
Balance at the end (in shares) at Mar. 31, 2022 | 8,814,283 | 31,000 | |||||||||
Balance at the end at Mar. 31, 2022 | $ 881 | $ (172) | $ 68,069,749 | $ (40,403,144) | $ 27,667,314 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (8,961,815) | $ (4,652,084) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 622,064 | 92,866 |
Common shares issued in exchange for services | 12,500 | |
Amortization of internally developed software | 958,639 | 774,929 |
Depreciation of property and equipment | 45,358 | 44,758 |
Bad debt expense | 161,074 | 108,096 |
Amortization of discount and debt issuance costs on convertible notes | 1,088 | 143,435 |
Amortization of debt issuance costs on note payable | 4,605 | |
Amortization of discount on bridge notes | 869,600 | |
Change in fair value of derivative liabilities | (1,311,700) | 159,000 |
Loss on extinguishment on bridge notes | 2,740,425 | |
Loss on extinguishment of convertible notes | 260,185 | |
Gain on extinguishment on note payable | (788,156) | |
Change in operating assets and liabilities: | ||
Accounts receivable | (1,637,124) | (800,908) |
Accounts receivable - unbilled | (1,086,259) | (198,185) |
Prepaid expenses and other current assets | 90,894 | (226,374) |
Tax credit receivable | 38,503 | 104,624 |
Accounts payable | (959,754) | 1,054,638 |
Accrued expenses | 198,893 | 282,142 |
Accrued interest | (1,708,922) | 1,951,429 |
Deferred revenue | (218,508) | 873,254 |
Net cash used in operating activities | (10,668,410) | (288,380) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (2,550) | (426) |
Capitalization of internally developed software | (1,035,367) | (1,102,186) |
Net cash used in investing activities | (1,037,917) | (1,102,612) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of bridge notes payable | 500,000 | 1,250,000 |
Proceeds from issuance of note payable | 3,500,000 | 783,008 |
Proceeds from exercise of stock options | 58,648 | 0 |
Proceeds from issuance of common stock in connection with public offering | 18,000,000 | |
Payment of offering costs in connection with the issuance of common stock in connection with public offering | (2,339,816) | |
Proceeds from issuance of common stock in connection with PIPE | 20,999,988 | |
Payment of transaction costs in connection with the issuance of common stock in connection with PIPE | (1,434,999) | |
Proceeds from exercise of warrants | 992 | |
Proceeds from issuance of over-allotment shares of common stock , net of transaction costs of $202,499 | 2,497,501 | |
Payment of principal to bridge note holders | (3,000,000) | |
Payment of debt issuance costs in connection with note payable | (32,917) | |
Net cash provided by financing activities | 38,749,397 | 2,033,008 |
Net decreases in cash | 27,043,070 | 642,016 |
Cash at beginning of period | 695,909 | 53,893 |
Cash at end of period | 27,738,979 | 695,909 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 2,824,032 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of redeemable convertible preferred stock into common stock | 11,173,076 | |
Conversion of convertible notes and accrued interest into common stock | 6,748,729 | |
Conversion of bridge notes and accrued interest into common stock | 4,717,646 | |
Issuance of common stock warrants as offering costs in connection with public offering of common stock | 374,400 | |
Issuance of common stock warrants in connection with Term Loan | 49,072 | |
Issuance of common stock warrants in connection with PIPE | $ 10,624,759 | |
Deferred offering costs included in accrued expenses | $ (57,420) |
STATEMENTS OF CASH FLOWS (Paren
STATEMENTS OF CASH FLOWS (Parenthetical) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
CONDENSED STATEMENTS OF CASH FLOWS | |
Transaction costs | $ 202,499 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | ||
NATURE OF BUSINESS | NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION Business iSpecimen Inc. (“iSpecimen” or the “Company”) was incorporated in 2009 under the laws of the state of Delaware. The Company has developed and launched a proprietary online marketplace platform that connects medical researchers who need access to subjects, samples, and data, with hospitals, laboratories, and other organizations who have access to them. iSpecimen is a technology-driven company founded to address a critical challenge: how to connect life science researchers who need human biofluids, tissues, and living cells (“biospecimens”) for their research, with biospecimens available (but not easily accessible) in healthcare provider organizations worldwide. The Company’s proprietary platform, the iSpecimen Marketplace platform, is designed to solve this problem and transform the biospecimen procurement process to accelerate medical discovery. The Company is headquartered in Lexington, Massachusetts and its principal market is North America. The Company operates as one operating Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) as determined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information, and, pursuant to the rules and regulations of Article 10 of Regulation S-X of the Securities Act of 1933, as amended (the “Securities Act”), published by the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. They may not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2021. Liquidity and Going Concern The Company has recognized recurring losses and as of March 31, 2022, the Company had working capital of $28,104,041, an accumulated deficit of $40,403,144, cash of $26,099,178 and accounts payable and accrued expenses of $1,321,468. Management believes that the Company's existing cash, which include the net proceeds from the Company’s initial public offering in June 2021 (the “IPO”), the Term Loan (defined below), and the PIPE (defined below) will allow the Company to continue its operations for at least the next 12 months from the date these unaudited condensed financial statements are issued and therefore the conditions raising substantial doubt raised in prior periods have been alleviated. As a result of recurring losses, the continued viability of the Company beyond May 2023 may be dependent on its ability to continue to raise additional capital to finance its operations. Impact of the COVID-19 Pandemic on the Company’s Operations In December 2019, the novel coronavirus SARS-Cov2, or COVID-19 outbreak, was reported to have surfaced in China. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency due to the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The Company is subject to the risks arising from the COVID-19 outbreak’s social and economic impacts on the healthcare services industry. The Company’s management believes that the social and economic impacts could have a significant impact on future financial condition, liquidity, and results of operations, which include but are not limited to the following: (i) restrictions on in-person activities arising from shelter-in-place, or similar isolation orders; (ii) inability to source specimens from the Company’s suppliers arising from shelter-in-place, or similar isolation orders; (iii) reduced capacity if personnel are infected or quarantined; (iv) decline in researcher demand for specimens; and (v) deteriorating economic conditions, such as increased unemployment rates and recessionary conditions. The COVID-19 outbreak has continued to impact the Company’s operations during the three months ended March 31, 2022 and 2021. In response to the COVID-19 outbreak, the Company initially implemented measures to help stabilize revenue as well as measures to reduce costs. To stabilize revenue, the Company added COVID-19 samples to its product line to support growing research in this area and also implemented mobile phlebotomy to more easily access research subjects. Cost saving measures included the elimination of non-essential travels and in-person training activities, the deferral of certain planned expenditures, and the furlough of a small number of employees in August 2020. Given the evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company expects this matter to continue to have an impact on its results of operations, financial condition, and liquidity. However, the extent of the financial impact and the duration cannot be reasonably estimated at this time. Impact of Russia’s Invasion of Ukraine on the Company’s Operations The Company’s business was negatively impacted during the first quarter of 2022 by Russia’s invasion of Ukraine. At the start of the conflict, the Company had approximately $1 million of purchase orders that were slated to be fulfilled by the Company’s supply network in Ukraine and Russia. This supply network shut down quickly at the start of the conflict. Ukrainian suppliers were disabled due to conflict conditions and evacuations and Russian suppliers were disabled by sanctions. While the Company mobilized to shift these purchase orders to other suppliers in the network, the process of getting specimen collections from other supply sites took time, which caused a delay in the fulfillment of such purchase orders. The Company believes that it has successfully resourced the purchased orders from different suppliers. The short and long-term implications of Russia’s invasion of Ukraine are difficult to predict at this time. The imposition of sanctions and counter sanctions may have an adverse effect on the economic markets generally and could impact the Company’s business and the businesses of the Company’s supply partners, especially those in Ukraine and Russia. Because of the highly uncertain and dynamic nature of these events, it is not currently possible to estimate the impact of Russian’s invasion of Ukraine on the Company’s business and the companies from which the Company obtains supplies and distributes specimens. | 1. iSpecimen Inc. (“iSpecimen” or the “Company”) was incorporated in 2009 under the laws of the state of Delaware. The Company has developed and launched a proprietary online marketplace platform that connects medical researchers who need access to subjects, samples, and data, with hospitals, laboratories, and other organizations who have access to them. iSpecimen is a technology-driven company founded to address a critical challenge: how to connect life science researchers who need human biofluids, tissues, and living cells (“biospecimens”) for their research, with biospecimens available (but not easily accessible) in healthcare provider organizations worldwide. The iSpecimen Marketplace platform was designed to solve this problem and transform the biospecimen procurement process to accelerate medical discovery. The Company is headquartered in Lexington, Massachusetts and its principal market is North America. The Company operates as one operating and reporting Basis of Presentation The Company’s financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). On March 30, 2021, the Company effected a 1-for-5.545 Initial Public Offering On June 21, 2021, the Company consummated its initial public offering ("IPO") in which the Company issued and sold 2,250,000 shares of its common stock at a public offering price of $8.00 per share, for aggregate gross proceeds of $18 million. The net proceeds from the IPO were $15.7 million after deducting underwriting discounts of $1.7 million and other offering costs of $0.6 million. The shares of common stock commenced trading on the Nasdaq Stock Market LLC on June 17, 2021 under the ticker symbol “ISPC.” Upon closing of the IPO, all of the then-outstanding shares of redeemable convertible preferred stock automatically converted into common stock at a ratio of 1:1, resulting in the issuance of 1,291,012 shares of common stock. Subsequent to the closing of the IPO, there were no shares of convertible preferred stock outstanding. Upon closing of the IPO, the Company converted all $5.5 million of its outstanding principal and all unpaid and accrued interest of approximately $1.3 million of the Convertible Notes (as defined below) into 1,206,614 shares of common stock at a conversion price of $5.60 per share. The Company incurred an approximately $0.3 million loss on conversion of the Convertible Notes during the year ended December 31, 2021. As of December 31, 2021, there were no Convertible Notes or Bridge Notes (as defined below) outstanding. Additionally, upon closing of the IPO, the Company converted $4 million of its outstanding principal and accrued and unpaid interest of approximately $0.7 million of the Bridge Notes, as amended, into 842,429 shares of common stock at a conversion price of $5.60 per share. During the year ended December 31, 2021, the Company paid off the remaining principal balance of $3.0 million on the Bridge Notes and accrued interest of $64,110. On July 1, 2021, the Company sold an additional 337,500 shares of its common stock, pursuant to the underwriters' full exercise of the overallotment option, at a public offering price of $8.00 per share, for aggregate gross proceeds of $2.7 million. In aggregate, the Company received approximately $18.2 million in net cash proceeds from the IPO after deducting for all underwriting discounts of $1.9 million and other offering costs of $0.6 million. Private Placement On December 1, 2021, the Company closed on a private placement (“PIPE”) for the sale of 1,749,999 shares of common stock of iSpecimen together with warrants to purchase 1,312,500 shares of common stock ("Warrants"), which resulted in gross proceeds to iSpecimen of approximately $21 million , before deducting offering costs of approximately $1,435,000 . Each share of common stock and accompanying three-quarters of one Warrant were sold at a combined offering price of $12.00 . The detachable Warrants have a five and one-half year term and an exercise price of $13.00 per share. Liquidity and Going Concern The Company has recognized recurring losses. At December 31, 2021, the Company had a net working capital of $30,442,955, an accumulated deficit of $38,019,402, cash of $27,738,979 and accounts payable and accrued expenses of $1,842,481. Management believes that the Company's existing cash, which include the net proceeds from the IPO, the Term Loan, and the PIPE will allow the Company to continue its operations for at least the next 12 months from the date these financial statements are issued and therefore the conditions raising substantial doubt raised in prior periods has been alleviated. As a result of recurring losses, the continued viability of the Company beyond March 2023 may be dependent on its ability to continue to raise additional capital to finance its operations. Impact of the COVID-19 Pandemic on our Operations In December 2019, the novel coronavirus SARS-Cov2, or COVID-19 outbreak, was reported to have surfaced in China. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency due to the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. iSpecimen is subject to the risks arising from the COVID-19 outbreak’s social and economic impacts on the healthcare services industry. Our management believes that the social and economic impacts, which include but are not limited to the following, could have a significant impact on future financial condition, liquidity, and results of operations: (i) restrictions on in-person activities arising from shelter-in-place, or similar isolation orders; (ii) inability to source specimens from our suppliers arising from shelter-in-place, or similar isolation orders; (iii) reduced capacity if personnel are infected or quarantined; (iv) decline in researcher demand for specimens; and (v) deteriorating economic conditions, such as increased unemployment rates and recessionary conditions. The COVID-19 outbreak has impacted the Company’s operations during the year ended December 31, 2021 and 2020. In response to the COVID-19 outbreak, the Company initially implemented measures to help stabilize revenue as well as measures to reduce costs. To stabilize revenue, the Company added COVID-19 samples to its product line to support growing research in this area and also implemented mobile phlebotomy to more easily access research subjects. Cost saving measures included the elimination of non-essential travel and in-person training activities, the deferral of certain planned expenditures, and the furlough of a small number of employees in August 2020. Given the evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company expects this matter to continue to have an impact on its results of operations, financial condition, and liquidity. However, the extent of the financial impact and the duration cannot be reasonably estimated at this time. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies and recent accounting standards are summarized in Note 2 of the Company’s annual report on Form 10-K for the year ended December 31, 2021. There were no significant changes to these accounting policies during the three months ended March 31, 2022. Use of Estimates The preparation of the Company’s unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of March 31, 2022 and December 31, 2021 because of their short-term nature. Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five-step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the Company satisfies the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for the Company’s medical research customers using the Company’s proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to the Company’s customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for the Company’s customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of the Company’s proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within the Company’s network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, which can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of the Company’s revenue recognition policy. The Company has concluded that it acts as principal in the arrangement as it manages the procurement process from beginning to end and determines which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as the Company has created an asset with no alternative use to the Company which has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract, and related order upon receipt, to determine if the specimen ordered has an alternative use by us. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. In the rare circumstances where specimens do have an alternative future use, the Company's performance obligation is satisfied at the time of shipment. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which the Company has an enforceable right to payment, has been accessioned, the Company records the offset to revenue in accounts receivable — unbilled. Once the specimen has been shipped and invoiced, a reclassification is made from accounts receivable — unbilled to accounts receivable. Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. The Company has a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, the Company has given the customer a credit for the returns. The Company has not recorded a returns allowance. The following table summarizes the Company’s revenue for the three months ended March 31: 2022 2021 Specimens – contracts with customers $ 2,372,386 $ 2,947,295 Shipping and other 146,274 16,512 Revenue $ 2,518,660 $ 2,963,807 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of March 31, 2022 and December 31, 2021, the Company had an allowance for doubtful accounts of $184,837 and $269,170, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. Internally Developed Software, Net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology costs and are expensed to operations as incurred. Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the three months ended March 31, 2022 and 2021. Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of Company-specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 per share at March 31, 2021. Restricted Stock Units The Company recognizes share-based compensation expense from restricted stock units (the “RSUs”) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 7. Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides common stock equivalents excluded from diluted net loss per share as of March 31: 2022 2021 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of RSUs 291,167 — Shares issuable upon exercise of stock options 176,142 265,102 Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants (defined below) to purchase common stock 90,000 — Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies ASC 740 to reduce complexity while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for the Company for interim and annual reporting periods beginning after December 15, 2021. The Company adopted this new standard as of January 1, 2022, but it did not have a material impact on the Company’s financial statements. In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02 (“ASU 2016-02”), which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In June 2020, the FASB issued ASU No. 2020-05 (“ASU 2020-05”) which pushed back the effective date of the adoption of ASC 842 one year for private and not-for-profit entities that did not issue or serve as conduit bond obligors and had not yet adopted the standard. The new effective date was for fiscal year periods beginning after December 15, 2021. The Company adopted ASU 2016-02 effective January 1, 2022 using the Comparatives Under 840 transition method whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted within the standard, among other practical expedients which allowed the Company to carry forward prior conclusions about lease identification and classification which allows not separating lease and non-lease components and allows not recording leases with an initial term of twelve months or less on the balance sheet across all existing asset classes. Adoption of the new standard resulted in the balance sheet recognition of additional assets of $333,000 and lease liabilities of approximately $333,000. For additional information regarding the Company’s lease arrangements, see Note 6 in the notes to unaudited condensed financial statements. | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. Reclassification Certain comparative figures have been reclassified to conform to the current year presentation. During 2021, the Company updated its accounting policy to allocate stock-based compensation costs to all departments. The costs were previously included only in general and administrative expenses. As a result of the reclassification, certain line items have been amended for the year ended December 31, 2020, in the statement of operations and the related notes to the financial statements. The reclassifications had no impact on the total operating expenses, net income or earnings per share for the year ended December 31, 2020. Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no significant off-balance sheet risks, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Cash accounts are maintained at financial institutions that potentially subject the Company to concentrations of credit risk. At December 31, 2021 and 2020, substantially all of the Company’s cash was deposited in accounts at one financial institution. The Company maintains its cash deposits, which at times may exceed the federally insured limits, with a reputable financial institution and, accordingly, the Company believes such funds are subject to minimal credit risk. Concentration of credit risk with respect to accounts receivable is typically related to customers who account for a significant portion of revenue. During 2021, no customers represented greater than 10% of the Company’s revenues, one customer represented approximately 11% of accounts receivable and two customers represented approximately 23% and 17% of accounts receivable-unbilled at December 31, 2021. During 2020, two customers represented approximately 11% and 10% of the Company’s revenues, one customer represented approximately 10% of accounts receivable, and three customers represented approximately 23%, 13% and 11% of accounts receivable-unbilled at December 31, 2020. During the years ended December 31, 2021 and 2020, revenue attributable to customers located in foreign countries is approximately 7% and 6% of revenue, respectively. During the years ended December 31, 2021 and 2020, accounts receivable attributable to customers located in foreign countries is approximately 6% and 11% of accounts receivable, respectively. During the years ended December 31, 2021 and 2020, accounts receivable-unbilled attributable to customers located in foreign countries is approximately 11% and 0% of accounts receivable-unbilled, respectively. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment . For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of December 31, 2021 and 2020 because of their short-term nature. The liability in connection with conversion features included within certain of the Company’s convertible notes payable was classified as a derivative liability for embedded conversion features on the balance sheets and is considered to be a Level 3 liability. Derivative Liability for Embedded Conversion Features The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates its convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for separately. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other bifurcated embedded derivative instruments in the convertible instrument, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The result of this accounting treatment is that the fair value of the embedded derivative is recorded as a liability and marked-to-market each balance sheet date, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Recent Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Accounting Standards Issued, Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) we satisfy the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for our medical research customers using our proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to our customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for our customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of our proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within our network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of our revenue recognition policy. The Company has concluded that we act as principal in the arrangement as we manage the procurement process from beginning to end and determine which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as we have created an asset with no alternative use to the Company and has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract and related order upon receipt to determine if the specimen ordered has an alternative use by us. In the rare circumstances where specimens do have an alternative future use, our performance obligation is satisfied at the time of shipment. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which we have an enforceable right to payment, has been accessioned, we record the offset to revenue in accounts receivable — Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. We have a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, we have given the customer a credit for the returns. We have not recorded a returns allowance. The following table summarizes the Company’s revenue for the years ended December 31: 2021 2020 Specimens – contracts with customers $ 10,944,255 $ 8,086,324 Shipping and other 191,048 97,782 Revenue $ 11,135,303 $ 8,184,106 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of December 31, 2021, and 2020, the Company had an allowance for doubtful accounts of $269,170 and $108,096, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. When an item is sold or retired, the costs and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the statement of operations. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the respective assets. A summary of estimated useful lives is as follows: Asset category Estimated Useful Life Website 3 years Computer equipment and purchased software 5 years Equipment 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life of asset or lease term Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. Internally Developed Software, net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology and are expensed to operations as incurred. Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the years ended December 31, 2021 and 2020. Debt Issuance Costs Debt issuance costs are recorded net against the related debt and amortized to interest expense over the life of the related debt. During the years ended December 31, 2021 and 2020, amortized debt issuance costs of $875,293 and $9,185 respectively, were recorded as a component of interest expense. Cost of Revenue Cost of revenue primarily consists of the purchase price to acquire specimens from hospitals and laboratories; inbound and outbound shipping costs; supply costs related to samples; payment processing and related transaction costs; and costs paid to the supply sites to support sample collections. Shipping costs upon receipt of products from suppliers are recognized in cost of revenue. For the year ended December 31, 2021, the Company acquired approximately 11%, 11%, 10% and 10% of specimens from four vendors. For the year ended December 31, 2020, the Company acquired approximately 21% of specimens from one vendor. Technology Technology costs include payroll and related expenses for employees involved in the development and implementation of iSpecimen’s technology; software license and system maintenance fees; outsourced data center costs; data management costs; depreciation and amortization; and other expenses necessary to support technology initiatives. Collectively, these costs reflect the investments the Company makes in order to offer a wide variety of products and services to customers. Technology and data costs are generally expensed as incurred. A portion of technology costs are related to research and development. Costs incurred for research and development are expensed as incurred, except for software development costs that are eligible for capitalization. Research and development costs primarily include salaries and related expenses, in addition to the cost of external service providers. For the years ended December 31, 2021, and 2020, research and development costs totaled $295,305 and $319,235, respectively. Sales and Marketing Sales and marketing costs primarily consist of payroll and related expenses for personnel engaged in marketing and selling activities, including salaries and sales commissions; travel expenses; public relations and social media costs; ispecimen.com website development and maintenance costs; search engine optimization fees; advertising costs; direct marketing costs; trade shows and events fees; marketing and customer relationship management software; and other marketing-related costs. Advertising expenses consist primarily of marketing, public relations, and promotional materials. Advertising costs are expensed as incurred and totaled $229,223 and $111,304 for the years ended December 31, 2021 and 2020, respectively. Supply Development The Company has agreements with supply partners that allow the Company to procure specimens from them and distribute these samples to customers. Supply development costs primarily include payroll and related expenses for personnel engaged in the development and management of this supply network; related travel expenses; regulatory compliance costs to support the network; and other supply development and management costs. Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing operations and customer service teams, including costs attributable to assess the feasibility of specimen requests; creating and managing orders; picking non-capitalizable, packaging, and preparing customer orders for shipment; responding to inquiries from customers; and laboratory equipment and supplies. General and Administrative General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses for human resources, legal, finance, and executive teams; associated software licenses; facilities and equipment expenses, such as depreciation and amortization expense and rent, outside legal expenses, insurance costs, and other general and administrative costs. Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 at December 31, 2020. The Company conducted multiple valuations throughout the year ended December 31, 2020 and the estimate of the fair value of the Company’s common stock ranged from $0.39 and $3.83 as a result of the changes in the factors described above. Restricted Stock Units (RSUs) The Company recognizes share-based compensation expense from restricted stock units (RSUs) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. Income Taxes The Company provides for income taxes using the asset and liability method. The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company does not have any material uncertain tax positions for which reserves would be required. The Company will recognize interest and penalties related to uncertain tax positions, if any, in income tax expense. Deferred Offering Costs Deferred offering costs are included in prepaid and other current assets and consists of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the planned initial public offering. The Company had approximately $265,000 of deferred offering costs related to the IPO which were recorded in other current assets on the balance sheet as of December 31, 2020. On June 21, 2021, the Company consummated its IPO; accordingly, the Company recognized deferred initial public offering costs of approximately $0.6 million as a reduction from gross proceeds associated with the IPO through additional paid-in capital in the accompanying condensed consolidated balance sheet. The Company recorded approximately $2.3 million of offering costs in additional paid-in capital in connection with the IPO. Accordingly, there were no deferred offering costs as of December 31, 2021. Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 9. Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides total shares outstanding, as of December 31: 2021 2020 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of restricted stock units 282,417 — Shares issuable upon exercise of stock options 255,147 251,847 Shares issuable upon exercise of PIPE Warrant to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants to purchase common stock 90,000 — |
FACTORING OF ACCOUNTS RECEIVABL
FACTORING OF ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2021 | |
FACTORING OF ACCOUNTS RECEIVABLE | |
FACTORING OF ACCOUNTS RECEIVABLE | 3. On January 1, 2021, the Company entered into a factoring agreement (the “Factoring Agreement”) with Versant Funding LLC (“Versant”), in which the Company agreed to sell a minimum of $1.2 million of its accounts receivable without recourse, and which the Company granted Versant a security interest in substantially all of the Company's assets, in accordance with the terms of the Factoring Agreement. On June 30, 2021, the Company terminated the Factoring Agreement paying Versant $139,374 in settlement of its balance payable to Versant pursuant to the Factoring Agreement. Upon termination of the Factoring Agreement, all future payments of accounts receivable shall be made directly to the Company. In July 2021, the Company received notice from Versant regarding an additional amount owed in relation to past factored receivables, resulting in an additional $214,497 payment to Versant. During the year ended December 31, 2021, net receivables sold under the Factoring Agreement was approximately Factoring fees paid under these arrangements totaled approximately $298,000 for the year ended December 31, 2021 which were recorded in general and administrative expenses in the statements of operations. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | ||
PROPERTY AND EQUIPMENT, NET | 3. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following at the dates indicated: March 31, December 31, 2022 2021 (unaudited) Website $ 107,927 $ 107,927 Computer equipment and purchased software 84,588 84,588 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 340,083 Accumulated depreciation (312,014) (307,302) Total property and equipment, net $ 28,069 $ 32,781 Depreciation expense for property and equipment was $4,712 and $11,130 for the three months ended March 31, 2022 and 2021, respectively. | 4. Property and equipment, net consisted of the following at December 31: 2021 2020 Website $ 107,927 $ 105,376 Computer equipment and purchased software 84,588 84,589 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 337,533 Accumulated depreciation (307,302) (261,944) Total property and equipment, net $ 32,781 $ 75,589 Depreciation expense for property and equipment was $45,358 and $44,758 for the years ended December 31, 2021 and 2020, respectively. |
INTERNALLY DEVELOPED SOFTWARE,
INTERNALLY DEVELOPED SOFTWARE, NET | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
INTERNALLY DEVELOPED SOFTWARE, NET | ||
INTERNALLY DEVELOPED SOFTWARE, NET | 4. INTERNALLY DEVELOPED SOFTWARE, NET During the three months ended March 31, 2022 and 2021, the Company capitalized $339,162 and $214,534, respectively, of internally developed software costs in connection with the development and continued enhancement of the technology platform and web interfaces. Capitalized costs primarily consist of software costs, payroll and payroll-related costs for the Company’s employees. The Company recognized $266,219 and $235,229 of amortization expense associated with capitalized internally developed software costs during the three months ended March 31, 2022 and 2021, respectively. | 5. During 2021 and 2020, the Company capitalized $1,035,367 and $1,102,186, respectively, of internally developed software costs in connection with the development and continued enhancement of the technology platform and web interfaces. Capitalized costs primarily consist of payroll and payroll-related costs for the Company’s employees. The Company recognized $958,639 and $774,929 of amortization expense associated with capitalized internally developed software costs during the years ended December 31, 2021, and 2020, respectively. Accumulated amortization associated with capitalized internally developed software costs as of December 31, 2021, and 2020 was $3,833,904 and $2,875,264, respectively. |
DEBT
DEBT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
DEBT | ||
DEBT | 5. DEBT Term Loan On August 13, 2021 (the "Closing Date"), the Company entered into a Loan and Security Agreement 30 The Company shall have the option to prepay all, but not less than all, of the outstanding loan balance, provided the Company a) delivers written notice to the financial institution of their election to prepay such Term Loan at least ten (10) days prior to such prepayment and b) pay, on the date of such prepayment, (1) all outstanding principal with respect to the Term Loan, plus accrued but unpaid interest, plus (2) all fees (including any late fee), and other sums, including bank expenses, if any, that shall have become due and payable. The Lender which holds the Term Loan is granted a security interest in substantially all assets of the Company (“Collateral”). The Term Loan contains certain covenants that the Company considers usual and customary for an agreement of this type for comparable commercial borrowers. As of March 31, 2022, the Company was not in compliance with one of the Term Loan covenants. See Note 10. The outstanding principal balance on the Term Loan was $3,500,000 as of March 31, 2022, and interest expense for the three months ended March 31, 2022 was $35,000. Debt issuance costs totaled $81,989, comprised of a warrant to purchase 12,500 shares of common stock issued to the Lender with a fair value of $49,072 (the "Lender Warrant"), fees of $23,066 paid to the Lender and legal costs of $9,851. Amortization of the debt issuance costs related to the Term Loan, included in interest expense on the statement of operations, totaled $3,048 for the period ending March 31, 2022. Unamortized debt issuance costs on the Term Loan totaled $74,336 and $77,384 as of March 31, 2022, and December 31, 2021, respectively. As of March 31, 2022, future minimum payments due related to the Term Loan were as follows: 2022 (excluding 3 months ended March 31, 2022) $ — 2023 1,166,667 2024 1,400,000 2025 933,333 Total 3,500,000 Less debt issuance cost (74,336) Term Loan, net $ 3,425,664 | 6. Note Payable In May 2020, the Company applied for and received $783,008 in unsecured loan funding from the Paycheck Protection Program (the “PPP Loan”), established pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). Under the terms of the promissory note (the “PPP Note”) and the PPP Loan, interest accrues on the outstanding principal at the rate of 1% per annum. Interest expense under the PPP Loan amounted to $279 and $5,127 for the years ended December 31, 2021 and 2020, respectively. The Company received full forgiveness of all outstanding principal of, and accrued and unpaid interest on the PPP Loan as of January 13, 2021. The forgiveness of the PPP Loan qualified for debt extinguishment and as a result, the outstanding principal and accrued and unpaid interest on the PPP Loan was recorded as a net gain on extinguishment of the PPP Loan totaling $788,156 for the year ended December 31, 2021 and the debt was eliminated from the Company's balance sheet. Related Party Convertible Notes Payable During 2017 and 2018, the Company issued Related Party Convertible Promissory Notes (the “Convertible Notes”) to related parties totaling $5,500,000. The Convertible Notes bear interest at a rate of six percent (6%) per annum, without compounding. The Convertible Notes are convertible into shares of the Company’s preferred stock, upon the following: (i) a new permanent equity financing yielding gross proceeds of in excess of $10,000,000, including conversion of the outstanding principal of the Convertible Notes (a “Qualified Equity Financing”), (ii) achievement of positive free flow from operations on a quarterly basis for the two consecutive quarters ending 90 days prior to the maturity date, (iii) an acquisition, or (iv) upon election of the holders of the majority of the aggregate principal outstanding (the “Majority Lenders”) The maturity date on the Convertible Notes is the earliest occurrence of (i) the closing of a Qualified Equity Financing, (ii) the date upon which prepayment by the Company occurs with the consent of the Majority Lenders, (iii) the date upon which the Convertible Notes are otherwise converted into equity securities, or (iv) March 31, 2020. In March 2020, the Majority Lenders elected to extend the maturity date through September 30, 2020. On October 1, 2020, the maturity date was further extended to March 31, 2021. On March 8, 2021, the maturity date was further extended to June 30, 2021. The Company has determined that the terms related to the Qualified Equity Financing conversion and acquisition conversion features (collectively, the “Embedded Conversion Features”) were determined to not be clearly and closely related to the Convertible Note host instrument and meet the definition of a derivative. Therefore, the Embedded Conversion Features were bifurcated from the Convertible Notes and separately measured at fair value. The derivative liability has been subsequently marked-to-market each reporting period with changes in fair value recognized in the statement of operations (see Note 7). Interest expense on the Convertible Notes totaled $156,411 and $330,904 for the years ended December 31, 2021 and 2020, respectively. Unamortized debt issuance costs on the Convertible Notes totaled $0 and $9,189 at December 31, 2021 and December 31, 2020, respectively. Debt discounts on the Convertible Notes totaled $0 and $0 for the years ended December 31, 2021 and 2020, respectively. During the years ended December 31, 2021 and 2020, amortization of debt discounts amounted to $1,088 and $141,628, respectively. Conversion of Convertible Notes Payable In connection with the consummation of the IPO, the Company converted all $5,491,663 of its outstanding principal and all unpaid and accrued interest of $1,257,066 of the Convertible Notes into 1,206,614 shares of common stock on June 21, 2021 at a conversion price of $5.60 per share. As of December 31, 2021, there were no Convertible Notes outstanding. The Company incurred an approximate $260,000 loss on conversion of the Convertible Notes during the year ended December 31, 2021. Bridge Financing From 2018 through 2021, the Company issued Secured Promissory Notes (the “Bridge Notes”) to new investors and existing stockholders in an amount of $7,000,000 to finance the Company’s interim working capital needs. Of this amount, $1,905,000 was issued to related parties (“Related Party Bridge Notes”). The Bridge Notes, including the Related Party Bridge Notes, have identical terms. The Bridge Notes bear interest at a rate of twenty-four percent (24%) per annum, without compounding. The Bridge Notes and all accrued interest are due and payable on the earliest occurrence of (i) a Qualified Equity Financing, (ii) the sale of the Company, (iii) prepayment by the Company, or (iv) December 31, 2019, which was subsequently extended to June 30, 2020. In June 2020, the Bridge Notes were amended to further extend the maturity date through September 30, 2020. On October 1, 2020, the Company amended the Bridge Notes to extend the maturity date to March 31, 2021 and to increase the interest rate from 24% to 30% after October 1, 2020. On March 15, 2021, the Company entered into an Amendment to the Bridge Notes and the maturity date was further extended to April 30, 2021. The Bridge Notes will be repayable upon demand of the Majority Lenders of the Bridge Notes at any time on or after the maturity date. The Bridge Notes are senior in right of payment and priority to any Convertible Debt and subordinated to any Senior Debt. The investors that hold the Bridge Notes are granted a security interest in substantially all assets of the Company (“Collateral”). On March 15, 2021, the Company entered into a Fifth Amendment (the "Amendment") to the Note Subscription Agreements and Secured Promissory Notes. The Bridge Notes are hereafter referred to as the "Amended Bridge Notes". The terms of the Amendment are as follows: Maturity Date The Amended Bridge Notes shall bear interest, on a non-compounding basis, at a rate of thirty percent (30%) per annum from and after October 1, 2020, due on maturity on the earlier of (i) the closing of an initial public offering yielding gross proceeds in excess of $18,000,000, exclusive of any existing Convertible Notes (a “Qualified IPO”), (ii) the sale of the Company, (iii) prepayment by the Company, or (iv) April 30, 2021. The Majority Lenders may, with the approval of the Company, elect to extend the maturity date one or more times, at their discretion. On April 28, 2021, the maturity date was further extended to May 31, 2021. On May 12, 2021, the maturity date was further extended to June 30, 2021. Elective Conversion Upon a Qualified IPO The holders of the Amended Bridge Notes may voluntarily elect, at any time prior the maturity date and up to March 19, 2021, to convert 50% or more of the outstanding unpaid principal plus any amount of outstanding unpaid interest at the time of the Qualified IPO, into the same class or series of securities of the Company to be offered and issued in the Qualified IPO (the “IPO Stock”). The conversion rate shall be equal to the issue price of the IPO Stock less a thirty percent (30%) discount (“the Elective Conversion Stock”). The elective conversion amount shall be deducted from the amount of principal and interest outstanding in order to arrive at an adjusted principal and interest repayment amount. The sum of the amounts being converted on the Amended Bridge Notes shall first convert the outstanding principal and then the outstanding interest second. Repayment of Adjusted Outstanding Interest and Principal Upon a Qualified IPO If a Qualified IPO is consummated prior to the maturity date, and the holders have not voluntarily converted, the Company shall make a cash payment to the holders of the Amended Bridge Notes equal to the greater of either the total adjusted outstanding interest or one and one-half times (1.50X) the Third-Party Loan Proceeds (“Note Repayment Proceeds”). Third-Party Loan Proceeds are defined as the net cash proceeds received by the Company from an institutional lender, commercial bank, or other similar lender consummated on or about the time of the Qualified IPO (or contingent upon the closing of the Qualified IPO). Repayments shall first be applied to the adjusted outstanding interest due in cash to the holders of the Amended Bridge Notes. The residual value shall be next applied to the adjusted outstanding principal (the “Principal Repayment Proceeds”). The remaining cash repayment shall be calculated by multiplying the Principal Repayment Proceeds by a fraction, the numerator of which is equal to the adjusted principal repayment amount of such note holder, and the denominator of which is equal to the total adjusted outstanding principal to all note holders. In no event shall any cash payment be made to any note holder exceed the sum of the adjusted interest repayment amount plus the adjusted principal repayment amount for such note holder. Automatic Conversion or Debt Extension Any remaining unpaid principal, calculated by subtracting the Principal Repayment Proceeds from the total adjusted outstanding principal (the “Automatic Principal Conversion Amount”), shall then automatically convert into IPO Stock at a rate equal to the issue price of the IPO Stock less a ten percent (10%) discount (that is, at a rate of ninety percent (90%) of the issue price of the IPO Stock; such discounted IPO Stock; the “Automatic Conversion Stock”). If the Company is unable to repay at least twenty-five percent (25%) of the total adjusted outstanding principal of the Amended Bridge Notes (“the “Principal Repayment Floor”), then no Automatic Conversion Stock shall be issued and the total adjusted outstanding principal on the Amended Bridge Notes shall remain on the books of the Company under their existing Bridge Notes which shall automatically be amended to (i) have their interest rates adjusted to a rate of fifteen percent (15%) per annum and (ii) have their maturity date set to a date that is eighteen (18) months from the date of the Qualified IPO. Amended Bridge Notes Embedded Conversion Features The Company has determined that the terms related to the elective and automatic conversion features (collectively, the “Amended Bridge Notes Embedded Conversion Features”) were determined to not be clearly and closely related to the Amended Bridge Notes host instrument and meet the definition of a derivative. Therefore, the Amended Bridge Notes Embedded Conversion Features were bifurcated from the Amended Bridge Notes and separately measured at fair value. The derivative liability has been subsequently marked-to-market each reporting period with changes in fair value recognized in the statement of operations. The Amended Bridge Notes Embedded Conversion Features were initially recorded as a component of the loss on debt extinguishment with an offset to the derivative liability at fair value. No related discount will be recorded on the Amended Bridge Notes, and the derivative liability will not be amortized using the effective interest rate over the term of the Amended Bridge Notes. Debt Extinguishment The Company evaluated the terms of the March 15, 2021 Amendment. This evaluation included analyzing whether there are significant and consequential changes to the economic substance of the Bridge Notes. If the change is deemed insignificant then the change is considered a debt modification, whereas if the change is substantial the change is reflected as a debt extinguishment. A modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date would always be considered substantial and require extinguishment accounting. The addition of the elective and mandatory conversion options, as described above, would be considered substantive based on the likelihood of the option being exercised in the near future in connection with a Qualified IPO event. Accordingly, the Company accounted for the amendment of the Notes as an extinguishment of the original Bridge Notes. As a result, the Company recorded a loss on extinguishment of $2,740,425. The extinguishment loss also included a write-off of unamortized debt issuance costs of approximately $5,700. Additionally, the Company recorded a discount on the Amended Bridge Notes of approximately $869,600, which was amortized through interest expense over the life of the Amended Bridge Notes (i.e., March 15, 2021 through April 30, 2021). Interest expense on the Bridge Notes, including $320,469 and $446,660 of related party interest expense, totaled $1,014,657 and $1,607,398 for the years ended December 31, 2021 and 2020, respectively. Unamortized debt issuance costs on the Amended Bridge Notes totaled $0 and $5,771 as of December 31, 2021 and 2020, respectively. Amortization of the debt discount on the Amended Bridge Notes totaled approximately $869,600 and $136,185 for the years ended December 31, 2021 and 2020, respectively. Conversion of Bridge Notes Upon the completion of the IPO, the Company converted $4,000,000 of its outstanding principal and accrued interest of $717,646 of the Bridge Notes, as amended, into 842,429 shares of common stock at a conversion price of $5.60 per share. The Company recognized a gain on the conversion of $9,746. The conversion of the Amended Bridge Notes and Convertible Notes upon the consummation of the IPO resulted in an increase in total stockholder's equity of $16,392,344. The components of this non-cash transaction are as follows for the year ended December 31, 2021: Write off of derivative liability relating to the Convertible Notes $ 2,644,000 Extinguishment of Convertible Notes principal 5,486,199 Accrued and unpaid interest on the Convertible Notes 1,257,066 Accumulated amortization on debt issuance costs 33,035 Loss on extinguishment of Convertible Notes 260,185 Write off of debt issuance costs (27,573) Write off of derivative liability relating to the Bridge Notes 2,031,300 Extinguishment of Bridge Notes principal 4,000,000 Accrued and unpaid interest on the Bridge Notes 717,646 Gain on extinguishment of Bridge Notes (9,514) Total conversion of Convertible Notes and Bridge Notes into common stock $ 16,392,344 During the third quarter of 2021, the Company paid off remaining principal of $3,000,000 and accrued interest of $64,110. As of December 31, 2021, there were no Bridge Notes outstanding. Term Loan On August 13, 2021 (the "Closing Date"), the Company entered into a Term Loan with Western Alliance Bank (the "Lender") in the amount of $3,500,000 for working capital needs. The Company has the option to request an additional advance in the amount of $1,500,000, which the Company has not yet borrowed as of December 31, 2021. The additional advance of $1,500,000 is available to the Company during the "Draw Period," which is defined in the Term Loan as the "period commencing on the Closing Date and ending the earlier to occur of (a) February 13, 2023, and (b) an Event of Default." The Term Loan bears interest at a rate equal to three-quarters of one percent (0.75%) above the Prime Rate. As of December 31, 2021, the interest rate on the Term Loan is 4.00% which is equal to 0.75% above the Prime Rate of 3.25 %. Interest is due and payable on the tenth ( 10 th) calendar day of each month during the term of the Term Loan. The Term Loan principal is payable in thirty ( 30 ) equal monthly installments, plus accrued interest, beginning on March 10, 2023, and continuing on the same day of each month through August 10, 2025 (the "Term Loan Maturity Date"), at which time all amounts shall be immediately due and payable. The Company shall have the option to prepay all, but not less than all, of the outstanding loan balance, provided the Company a) delivers written notice to the financial institution of their election to prepay such Term Loan at least ten (10) days prior to such prepayment and b) pay, on the date of such prepayment, (1) all outstanding principal with respect to the Term Loan, plus accrued but unpaid interest, plus (2) all fees (including any late fee), and other sums, including bank expenses, if any, that shall have become due and payable. The Lender which holds the Term Loan is granted a security interest in substantially all assets of the Company (“Collateral”). The Term Loan contains certain covenants that the Company considers usual and customary for an agreement of this type for comparable commercial borrowers, and as of December 31, 2021 we were in compliance with all Term Loan covenants. The outstanding principal balance on the Term Loan was $3,500,000 as of December 31, 2021. Interest expense on the Term Loan totaled $47,444 and $0 for the years ended December 31, 2021 and 2020, respectively. Debt issuance costs totaled $81,989, comprised of a warrant to purchase 12,500 shares of common stock issued to the Lender with a fair value of $49,072 (the "Lender Warrant"), fees paid of $23,066 to the Lender and legal costs of $9,851. Amortization of the debt issuance costs related to the Term Loan, included in interest expense on the statement of operations, totaled $5,175 and $0 for the years ended December 31, 2021 and 2020, respectively. Unamortized debt issuance costs on the Term Loan totaled $77,384 and $0 at December 31, 2021 and 2020, respectively. As of December 31, 2021, future minimum payments related to long-term debt is as follows: Year Ending December 31, Amount Due 2022 $ — 2023 1,166,667 2024 1,400,000 2025 933,333 Total 3,500,000 Less debt issuance cost (77,384) Long-term debt, net $ 3,422,616 |
FAIR VALUE OF DERIVATIVE LIABIL
FAIR VALUE OF DERIVATIVE LIABILITY | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE OF DERIVATIVE LIABILITY | |
FAIR VALUE OF DERIVATIVE LIABILITY | 7. Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the Company’s balance sheets as of the following dates indicated: Fair Value at December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability on convertible notes payable, related parties $ — $ — $ — $ — Total liabilities $ — $ — $ — $ — Fair value at December 31, 2020 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability on convertible notes payable, related parties $ 2,373,000 $ — $ — $ 2,373,000 Total liabilities $ 2,373,000 $ — $ — $ 2,373,000 The table below provides a summary of the changes in fair value of the derivative liability measured on a recurring basis using significant unobservable inputs (Level 3) during the year ended December 31: 2021 2020 Balance, beginning of year $ 2,373,000 $ 2,214,000 Derivative liability on bridge notes payable and bridge notes payable, related parties 3,614,000 — (Gain) loss included in earnings (1,311,700) 159,000 Write off of derivative liabilities in connection with debt conversion (4,675,300) — Balance, end of year $ — $ 2,373,000 Derivative Liability on Convertible Notes Payable, Related Parties The Embedded Conversion Features are separately measured at fair value, with changes in fair value recognized in current operations. The Company used a scenario-based analysis to estimate the fair value of the Embedded Conversion Features at issuance of the Convertible Notes. The scenario-based analysis estimates the fair value of the Convertible Notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholders, including various IPO, settlement, equity financing, corporate transaction and dissolution scenarios. Estimating fair values of Embedded Conversion Features requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Because the Embedded Conversion Features are initially and subsequently carried at fair values, the Company’s income will reflect the volatility in these estimate and assumption changes. The original values of the Embedded Conversion Features were recorded as a derivative liability with the offset as a debt discount to the Convertible Notes which was amortized over the original term of the Convertible Notes. The derivative liability on the Related Party Convertible Notes was written-off on June 21, 2021, upon the conversion of the Convertible Notes to common stock in connection with the consummation of the IPO. Immediately prior to the IPO, the derivative liability was marked to fair value resulting in a loss of $117,000 for the year ended December 31, 2021. Derivative Liability on Bridge Notes Payable and Bridge Notes Payable, Related Parties The Embedded Conversion Features are separately measured at fair value, with changes in fair value recognized in current operations. The Company used a scenario-based analysis to estimate the fair value of the Embedded Conversion Features at issuance of the Amended Bridge Notes. The scenario-based analysis estimates the fair value of the Amended Bridge Notes based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to the noteholders, including various IPO, and settlement scenarios. Estimating fair values of Embedded Conversion Features requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Because the Embedded Conversion Features are initially and subsequently carried at fair values, the Company’s income will reflect the volatility in these estimate and assumption changes. The Amended Bridge Notes Embedded Conversion Features were initially recorded as a component of the loss on debt extinguishment with an offset to the derivative liability at fair value. No related discount will be recorded on the Amended Bridge Notes, and the derivative liability will not be amortized using the effective interest rate over the term of the Amended Bridge Notes. The derivative liability balance on the Amended Bridge Notes payable of $2,031,300 was written off on June 21, 2021, upon the conversion of the Amended Bridge Notes to common stock in connection with the consummation of the IPO, as the Amended Bridge Notes did not contain any further conversion features subsequent to the IPO. Immediately prior to the IPO, the derivative liability was marked to fair value. A portion of the Bridge Note holders did not elect to convert at the IPO, as a result, the Company recorded a gain of $1,630,700 for the year ended December 31, 2021. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Leases The Company has one operating lease of office space in Lexington, Massachusetts that will expire on February 28, 2024. Leases with an initial term of twelve months or less are not recorded on the balance sheet date, and the Company does not separate lease and non-lease components of contracts. There are no material residual guarantees associated with any of the Company’s leases, and there are no significant restrictions or covenants included in the Company’s lease agreements. The Company’s lease agreement does not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived an imputed rate, which was used to discount its real estate lease liabilities. The Company used estimated incremental borrowing rates for its active real estate lease. The calculated incremental borrowing rate was 5.96%, which was calculated based on remaining lease term of 1.92 years as of January 1, 2022. There was no sublease rental income for the three months ended March 31, 2022, and the Company is not the lessor in any lease arrangement, and there were no related-party lease agreements. Undiscounted Cash Flows Future lease payments included in the measurement of lease liabilities on the balance sheet are as follows: 2022 (excluding three months ended March 31, 2022) $ 122,631 2023 165,254 2024 27,601 Total future minimum lease payments 315,486 Less effect of discounting (18,104) Present value of future minimum lease payments $ 297,382 Rent expense for the three months ended March 31, 2022 and 2021 amounted to $44,957 and $40,178, respectively. Cash Flows Supplemental cash flow information related to operating lease for the three months ended March 31, 2022 was as follows: Non-cash operating lease expense (operating cash flow) $ 36,291 Change in operating lease liabilities (operating cash flow) $ (35,741) Supplemental non-cash amounts of operating lease liabilities arising from obtaining right-of-use assets $ 333,123 Legal Proceedings From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and misclassification, intellectual property, commercial or contractual claims, or other consumer protection statutes. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. As of March 31, 2022, there was no material litigation against the Company. | 8. Leases The Company leases its office space in Lexington, Massachusetts under a non-cancelable operating lease that was entered into in September 2012 and most recently amended on April 10, 2017. The lease requires monthly rental payments, presented by year in the table below, which escalate during the lease term and expires on February 28, 2024. The difference between straight-line rent expense and rent paid is immaterial. Year Ending December 31, Operating Leases 2022 $ 163,158 2023 165,254 2024 27,601 Total $ 356,013 Rent expense for the years ended December 31, 2021 and 2020 amounted to $167,167 and $136,281, respectively. Legal Proceedings From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and misclassification, intellectual property, commercial or contractual claims, or other consumer protection statutes. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. As of December 31, 2021, there was no material litigation against the Company. |
CONVERTIBLE PREFERRED STOCK AND
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDER'S DEFICIT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY | ||
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT | 7. STOCKHOLDERS’ EQUITY The Company’s authorized capital is 250,000,000 shares, of which (1) 200,000,000 shares are common stock, par value $0.0001 per share and (2) 50,000,000 are preferred stock, par value $0.0001 per share, which may, at the sole discretion of the Company’s board of directors be issued in one or more series. Common Stock During the three months ended March 31, 2022, the Company issued 77,679 shares of common stock for cash exercises of options of $75,277. Warrants Underwriter Warrants In connection with the Company's underwriting agreement with ThinkEquity, a division of Fordham Financial Management, Inc. and the representative of the Company’s IPO underwriters Lender Warrant In connection with the Term Loan entered into on August 13, 2021, the Company issued a Lender Warrant to Lender to purchase 12,500 shares of common stock of the Company. The Lender Warrant is exercisable at a per share exercise price of $8.00 and is exercisable at any time on or after August 13, 2021 through August 12, 2031. The Company determined that the Lender Warrant was equity-classified. As of March 31, 2022, the Lender Warrant had not been exercised, and had a weighted average exercise price of $12.06 per share and a remaining weighted average time to expiration of 9.38 years. PIPE Warrants On December 1, 2021, the Company completed a private placement (the “PIPE”) in which the Company issued warrants (the “PIPE Warrants”) to purchase up to an aggregate of 1,312,500 shares of common stock. These PIPE Warrants have an exercise price of $13.00 per share and are immediately exercisable upon issuance and will expire on the five- and one-half-year anniversary of the issuance date. As of March 31, 2022, the PIPE Warrants had not been exercised, The following assumptions were used to estimate the fair value of warrants granted using the Black-Scholes-Merton option pricing model during the three months ended March 31: 2022 2021 Assumptions: Risk-free interest rate — 0.90% - 1.30% Expected term (in years) — 5.00 10.00 Expected volatility — 59% - 69% Expected dividend yield — — A summary of warrant activity during the three months ended March 31, 2022 was as follows: Weighted Average Weighted Remaining Warrants Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2021 1,415,000 $ 9.76 5.34 Granted — — — Exercised — — — Cancelled/forfeited — — — Balance at March 31, 2022 1,415,000 $ 9.76 5.22 | 9. Pursuant to the Company's fourth amended and restated certificate of incorporation dated June 17, 2021, the Company's authorized capital is 250,000,000 shares, of which (1) 200,000,000 shares are common stock, par value $0.0001 per share and (2) 50,000,000 are preferred stock, par value $0.0001 per share, which may, at the sole discretion of the Company's board of directors be issued in one or more series. Redeemable Convertible Preferred Stock Upon the consummation of the IPO, 1,291,012 shares of outstanding preferred stock automatically converted into 1,291,012 shares of common stock. As of December 31, 2021, there were no shares of preferred stock outstanding. Common Stock The Company issued 2,250,000 shares of common stock in connection with the IPO during the year ended December 31, 2021. Additionally, the Company issued 1,206,614 shares of common stock in connection with the conversion of all the Convertible Notes and accrued interest and 842,429 shares of common stock in connection with the conversion of $4.7 million of the outstanding principal and accrued interest on the Bridge Notes. On July 1, 2021, the Company issued and sold 337,500 additional shares of common stock, pursuant to the underwriters' exercise of its overallotment option, at a public offering price of $8.00 per share, for aggregate gross proceeds of $2.7 million. The net proceeds from the overallotment were $2.5 million after deducting underwriting discounts of $0.2 million. Inclusive of the underwriters' option to purchase additional shares, the Company received approximately $18.2 million in net proceeds from the IPO, after deducting underwriting discounts of $1.9 million and other offering costs of $0.6 million. On August 1, 2021, the Company issued 2,000 shares of common stock in exchange for investor relations services. The shares of common stock had a fair value of $6.25 per share for a total aggregate value of $12,500. On December 1, 2021, the Company completed a PIPE in which the Company issued and sold 1,749,999 shares of common stock and the warrants to purchase up to an aggregate of 1,312,500 shares of common stock, at a combined purchase price of $12.00 per share for aggregate gross proceeds of approximately $21 million. The net proceeds from the PIPE were $19.6 million after deducting placement agent commissions of $1.26 million and other offering costs . Warrants During the year ended December 31, 2021, warrant holders exercised 17,889 warrants to purchase common stock, resulting in the issuance of 17,889 shares of common stock for total proceeds of $992. As of December 31, 2021, 5,420 warrants expired, and were not exercised. Underwriter Warrants In connection with the Company's underwriting agreement with ThinkEquity, the Company entered into a warrant agreement to purchase up to 90,000 shares of common stock, par value $0.0001 (the "Underwriter Warrant"). The Underwriter Warrant is exercisable at a per share exercise price of $10.00 and is exercisable at any time and from time to time, in whole or in part, during the four- and one-half year period commencing 180 days from the effective date of the registration statement. The Warrant became exercisable on or after December 16, 2021 (six months from the effective date of the offering) and expires on June 15, 2026. Upon issuance of these warrants, as partial compensation for its services as an underwriter, the fair value of approximately $0.4 million was recorded as equity issuance costs. Lender Warrant In connection with the Term Loan entered into on August 13, 2021, the Company issued a Lender Warrant to purchase 12,500 shares of common stock to the Lender. The Lender Warrant is exercisable at a per share exercise price of $8.00 and is exercisable at any time on or after August 13, 2021 through August 12, 2031. The Company determined that the Lender Warrant is equity-classified. As of December 31, 2021, the Lender Warrant had not been exercised, and had a weighted average exercise price of $8.00 and a remaining weighted average time to expiration of 9.62 years. PIPE Warrants On December 1, 2021, the Company completed a PIPE in which the Company issued warrants to purchase up to an aggregate of 1,312,500 shares of common stock. These warrants have an exercise price of $13.00 and are immediately exercisable upon issuance and will expire on the five- and one-half-year anniversary of the issuance date The following assumptions were used to estimate the fair value of warrants granted using the Black-Scholes-Merton option pricing model during the years ended December 31: 2021 2020 Assumptions: Risk-free interest rate 0.90% - 1.30 % — % Expected term (in years) 5.00 - 10.00 — Expected volatility 59% - 69 % — % Expected dividend yield — % — % A summary of total warrant activity during the year ended December 31, 2021 is as follows: Weighted Average Remaining Options Weighted Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2019 — $ — — Granted 23,309 0.06 0.75 Exercised — — — Cancelled/forfeited — — — Balance at December 31, 2020 23,309 $ 0.06 0.75 Granted 1,415,000 12.77 5.34 Exercised (17,889) 0.06 — Cancelled/forfeited (5,420) 0.06 — Balance at December 31, 2021 1,415,000 $ 9.76 5.34 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | ||
SHARE-BASED COMPENSATION | 8. SHARE-BASED COMPENSATION Stock Options As of March 31, 2022, there were 112,206 and 217,414 shares of common stock available for future grants under the Company’s 2013 Stock Incentive Plan and 2021 Plan (defined below) (collectively, the “Plans”), respectively. The following assumptions were used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model during the three months ended March 31: 2022 2021 Assumptions: Risk-free interest rate — 0.47% – 0.64% Expected term (in years) — 5.81 – 5.85 Expected volatility — 49.88% –49.98% Expected dividend yield — — A summary of stock option activity under the Plans is as follows: Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Granted — — — — Exercised (77,679) 1.04 — 336,632 Cancelled/forfeited (1,326) 1.00 — Balance at March 31, 2022 176,142 $ 1.18 8.01 $ 500,420 Options exercisable at March 31, 2022 135,786 $ 1.25 7.09 $ 559,850 The aggregate intrinsic value in the table above represents the difference between the Company's stock price as of the balance sheet date and the exercise price of each in-the-money option on the last day of the period. The total intrinsic value of stock options exercised was approximately $336,632 during the three months ended March 31, 2022. There were no options exercised during the three months ended March 31, 2021. The weighted average grant date fair value of stock options issued in the three months ended March 31, 2022 and 2021 was $0 and $1.77, respectively. The Company recorded stock options compensation expense as follows for the three months ended March 31: 2022 2021 Operating expenses: General and administrative $ 26,337 $ 9,104 Sales and marketing 1,075 1,950 Fulfillment 825 1,469 Supply development 306 288 Technology 1,012 9,225 Total stock options expense $ 29,555 $ 22,036 A total of $212,195 of unamortized compensation expense at March 31, 2022 will be recognized over the remaining requisite service period of 2.1 years. During the three months ended March 31, 2022, the Company received proceeds of $75,277 from the exercise of stock options. 2021 Stock Incentive Plan On June 16, 2021, the Company adopted the iSpecimen Inc. 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan was adopted to enhance the Company’s ability to attract, retain and motivate employees, officers, directors, consultants and advisors by providing such persons with equity ownership opportunities and performance-based incentives. The 2021 Plan authorizes options, restricted stock, RSUs and other stock-based awards. The Company's board of directors, or any committee to which the board of directors delegates such authority, has the sole discretion in administering, interpreting, amending or accelerating the 2021 Plan. Awards may be made under the 2021 Plan for up to 608,000 shares of the Company's common stock, and the 2021 Plan was made effective with the completion of the IPO. During the three months ended March 31, 2022, 11,000 equity awards were issued under the 2021 Plan. Restricted Stock Units Total recognition of RSUs expense to employees was as follows for the three months ended March 31: 2022 Operating expenses: General and administrative $ 7,932 Sales and marketing 14,167 Fulfillment 13,631 Supply development 7,196 Technology 13,400 Total RSU expense $ 56,326 These RSUs are subject to one-year cliff vesting, with 25% of the RSUs vesting on the first anniversary of issuance. The remaining RSUs vest quarterly over a three-year period. As of March 31, 2022, unrecognized stock-based compensation expense related to the unvested employee RSUs was $835,347, which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 3.40 years. During the three months ended March 31, 2021, there were no RSUs issued. During July 2021, the Company granted 189,396 RSUs to members of the executive team. Stock compensation expense of $78,955 was recorded in general and administrative expense for the three months ended March 31, 2022. These RSUs are subject to a four-year vesting period, with 20% of the RSUs vesting immediately upon issuance. The remaining RSUs vest annually over a four-year period. As of March 31, 2022, unrecognized stock-based compensation expense related to the unvested RSUs was $727,261 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 3.23 years. During July 2021, the Company granted 12,500 RSUs to its directors. Stock compensation expense of $19,356 was recorded in general and administrative expense for the three months ended March 31, 2022. These RSUs vest quarterly over a one-year period. As of March 31, 2022, unrecognized stock-based compensation expense related to these unvested RSUs was $26,023 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 0.25 Weighted RSUs Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2021 285,542 $ 6.77 Granted 11,000 4.06 Vested (3,125) 6.28 Forfeited (2,250) 1.27 Unvested Balance at March 31, 2022 291,167 $ 6.68 Performance Stock Units During July 2021, the Company issued 47,349 performance stock units (“PSUs”) to four members of the executive team pursuant to each executive's employment agreement executed in connection with the IPO. The PSUs are subject to certain performance obligations relating to certain revenue and cost of revenue metrics to be determined at the beginning of each fiscal year within the four year vesting period. In year one of the four-year vesting period, the Company was not able to predict the likelihood of achieving the targets pursuant to the metrics in each of the executives' employment agreements, and therefore no stock compensation expense was recognized for the three months ended March 31, 2022. | 10. SHARE-BASED COMPENSATION Stock Options As of December 31, 2021, there were 105,845 and 226,164 shares of common stock available for future grants under the Company's 2013 Stock Incentive Plan and 2021 Stock Incentive Plan, respectively. The following assumptions were used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model during the years ended December 31: 2021 2020 Assumptions: Risk-free interest rate 0.47% – 0.66 % 0.30% – 1.41 % Expected term (in years) 5.81 – 5.89 5.32 – 6.14 Expected volatility 49.83% –49.98 % 43.11% – 50.14 % Expected dividend yield — % — % A summary of stock option activity under the 2013 Stock Incentive Plan and 2021 Stock Incentive Plans is as follows: Weighted Average Remaining Options Weighted Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at January 1, 2019 224,884 $ 1.08 8.78 $ — Granted 43,259 1.00 — — Exercised — 1.00 — — Cancelled/forfeited (16,296) 4.20 — — Balance at December 31, 2020 251,847 $ 1.00 8.06 $ 89,100 Granted 70,164 5.74 9.34 432,520 Exercised (55,694) 1.00 — 379,276 Cancelled/forfeited (11,170) 1.00 — — Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Options exercisable at December 31, 2021 179,711 $ 1.12 7.04 $ 1,219,964 The aggregate intrinsic value in the table above represents the difference between the Company's stock price as of the balance sheet date and the exercise price of each in-the-money option on the last day of the period. The total intrinsic value of stock options exercised was approximately $379,276 and $0 and during the year ended December 31, 2021 and 2020, respectively. The weighted-average grant date fair value of stock options issued in the years ended December 31, 2021 and 2020 was $3.94 and $0.55, respectively. The Company recorded compensation expense as follows for years ended December 31, 2021 and 2020: 2021 2020 Operating expenses: General and administrative $ 257,005 $ 38,367 Sales and marketing 55,035 8,216 Fulfillment 41,482 6,193 Supply development 8,138 1,215 Technology 260,404 38,875 Total $ 622,064 $ 92,866 A total of $432,520 of unamortized compensation expense at December 31, 2021, will be recognized over the remaining requisite service period of 2.4 years. During 2021 and 2020, the Company received proceeds of $58,648 and $0 from the exercise of stock options, respectively. 2021 Stock Incentive Plan On June 16, 2021, the Company adopted the iSpecimen Inc. 2021 Stock Incentive Plan (“the 2021 Plan”). The 2021 Plan was adopted to enhance our ability to attract, retain and motivate employees, officers, directors, consultants and advisors by providing such persons with equity ownership opportunities and performance-based incentives. The 2021 Plan authorizes options, restricted stock, restricted stock units and other stock-based awards. The Company's Board of Directors, or any committee to which the Board of Directors delegates such authority, has the sole discretion in administering, interpreting, amending or accelerating the 2021 Plan. Awards may be made under the 2021 Plan for up to 608,000 shares of the Company's common stock, and the 2021 Plan was made effective with the completion of the IPO. During the year ended December 31, 2021, 381,836 equity awards were issued from the 2021 Plan. Restricted Stock Units During the year ended December 31, 2021, the Company granted 127,350 restricted stock units to employees, resulting in recognition of the following expense : 2021 Operating expenses: General and administrative $ 6,453 Fulfillment 21,824 Sales and marketing 25,686 Supply development 13,304 Technology 18,290 Total $ 85,557 These restricted stock units are subject to one three During July 2021, the Company granted 189,396 restricted stock units to members of the executive team, resulting in expense of $394,555 recorded in general and administrative expense and technology. These restricted stock units are subject to a four year vesting period, with 20% of the units vesting immediately upon issuance. The remaining restricted stock units vest annually over a four-year period. As of December 31, 2021, unrecognized stock-based compensation expense related to the unvested restricted stock units was $806,216 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 3.47 years. During July 2021, the Company granted 12,500 restricted stock units to board directors, resulting in expense of $33,121 recorded in general and administrative expense and technology. These restricted stock units vest quarterly over a one-year period. As of December 31, 2021, unrecognized stock-based compensation expense related to these unvested restricted stock units was $45,379 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 0.50 years. During the year ended December 31, 2020, no restricted stock units were granted by the Company, nor were there any outstanding. Options Weighted Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2020 — $ — Granted 329,246 6.71 Vested (44,129) 6.33 Forfeited (2,700) 6.34 Unvested Balance at December 31, 2021 282,417 $ 6.78 Performance Stock Units During July 2021, the Company issued 47,349 performance stock units to four members of the executive team pursuant to each executive's employment agreement executed in connection with the IPO. The performance stock units are subject to certain performance conditions relating to certain revenue and cost of revenue metrics to be determined at the beginning of each fiscal year within the four year vesting period. In year one of the four-year vesting period, the Company was not able to predict the likelihood of achieving the targets pursuant to the metrics in each of the executives' employment agreements, and therefore no stock compensation expense was recognized for the year ended December 31, 2021. |
INCOME TAXES
INCOME TAXES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
INCOME TAXES | 9. INCOME TAXES As of March 31, 2022 and December 31, 2021, the Company had federal net operating loss carryforwards of approximately $32,500,000 and $30,300,000, respectively, of which approximately $13,000,000 expires at various periods through 2037 and approximately $19,500,000 and $17,300,000, respectively, can be carried forward indefinitely. As of March 31, 2022 and December 31, 2021, the Company had state net operating loss carryforwards of approximately $23,400,000 and $22,400,000, respectively, that expire at various periods through 2042, respectively. At March 31, 2022 and December 31, 2021, the Company had federal and state tax credits of approximately $900,000 and $850,000, respectively, available for future periods that expire at various periods through 2042. The Company has recorded a full valuation allowance against net deferred income tax assets due to a history of losses generated since inception. | 11. There was no provision for income taxes for the years ended December 31, 2021 and 2020 due to the Company’s operating losses and a full valuation allowance on deferred tax assets. The Company completed research and development studies covering all tax years currently under the applicable statute of limitations. The benefits of the study are reflected in the 2021 and 2020 financial statements as a tax credit receivable in the amount of approximately $141,000 Significant components of the Company’s deferred tax assets and liabilities as of December 31 are as follows: 2021 2020 Deferred tax assets: Operating loss carryforwards $ 7,775,000 $ 6,600,000 Research and development tax credit 850,000 700,000 Other 325,000 700,000 Total deferred tax assets 8,950,000 8,000,000 Deferred tax liability: Intangibles (300,000) (250,000) Total deferred tax liabilities (300,000) (250,000) Net deferred tax assets before valuation allowance 8,650,000 7,750,000 Valuation allowance (8,650,000) (7,750,000) Net deferred tax asset $ — $ — The Company has provided a valuation allowance against the deferred tax assets as it has incurred significant losses since its inception. Management currently believes that it is more likely than not that the deferred tax assets will not be realized in the future. The change in the valuation allowance during 2021 was an increase of $900,000. At December 31, 2021, the Company had federal net operating loss (“NOL”) carryforwards of approximately $30,300,000 of which approximately $13,000,000 expire at various periods through 2037 and approximately $17,300,000 can be carried forward indefinitely. The Company also had state NOL carryforwards of approximately $22,400,000 that expire at various periods through 2041. At December 31, 2021, the Company had federal and state tax credits of approximately $850,000 available for future periods that expire at various periods through 2041. Due to changes in ownership provisions of the Internal Revenue Code, the availability of the Company's NOL carryforwards may be subject to annual limitations under Section 382 of the Internal Revenue Code against taxable income in the future period, which could substantially limit the eventual utilization of such carryforwards. The Company applies the standards on uncertainty in income taxes. The Company did not have any significant unrecognized tax benefits during the year ended December 31, 2020. The Company’s U.S. federal operating losses have occurred since its inception and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities. The Company’s income tax provision was computed using the federal statutory rate and average state statutory rates, net of related federal benefit. The following represents a reconciliation of the statutory income tax rates to the effective rates at December 31: 2021 2020 Reconciliation to statutory rates Expected federal income taxes benefit at statutory rates (21.0) % (21.0) % Expected state tax benefit at statutory rates, net of federal benefit (8.0) (8.0) Change in valuation allowance 25.7 29.0 Forgiveness of PPP Loan 3.3 — Income tax expense (benefit) — % — % |
EMPLOYEE BENEFITS PLAN
EMPLOYEE BENEFITS PLAN | 12 Months Ended |
Dec. 31, 2021 | |
EMPLOYEE BENEFITS PLAN | |
EMPLOYEE BENEFITS PLAN | 12. The Company has established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code (the “401(k) Plan”). The 401(k) Plan is available to all eligible employees. The 401(k) Plan allows participants to defer a portion of their annual compensation subject to certain Internal Revenue Service limitations. The Company may make matching contributions and additional profit-sharing contributions at its discretion. The Company has not made any matching contributions to the 401(k) Plan during the years ended December 31, 2021 and 2020. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Use of Estimates | Use of Estimates The preparation of the Company’s unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. |
Reclassification | Reclassification Certain comparative figures have been reclassified to conform to the current year presentation. During 2021, the Company updated its accounting policy to allocate stock-based compensation costs to all departments. The costs were previously included only in general and administrative expenses. As a result of the reclassification, certain line items have been amended for the year ended December 31, 2020, in the statement of operations and the related notes to the financial statements. The reclassifications had no impact on the total operating expenses, net income or earnings per share for the year ended December 31, 2020. | |
Off-Balance Sheet Risk and Concentrations of Credit Risk | Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no significant off-balance sheet risks, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Cash accounts are maintained at financial institutions that potentially subject the Company to concentrations of credit risk. At December 31, 2021 and 2020, substantially all of the Company’s cash was deposited in accounts at one financial institution. The Company maintains its cash deposits, which at times may exceed the federally insured limits, with a reputable financial institution and, accordingly, the Company believes such funds are subject to minimal credit risk. Concentration of credit risk with respect to accounts receivable is typically related to customers who account for a significant portion of revenue. During 2021, no customers represented greater than 10% of the Company’s revenues, one customer represented approximately 11% of accounts receivable and two customers represented approximately 23% and 17% of accounts receivable-unbilled at December 31, 2021. During 2020, two customers represented approximately 11% and 10% of the Company’s revenues, one customer represented approximately 10% of accounts receivable, and three customers represented approximately 23%, 13% and 11% of accounts receivable-unbilled at December 31, 2020. During the years ended December 31, 2021 and 2020, revenue attributable to customers located in foreign countries is approximately 7% and 6% of revenue, respectively. During the years ended December 31, 2021 and 2020, accounts receivable attributable to customers located in foreign countries is approximately 6% and 11% of accounts receivable, respectively. During the years ended December 31, 2021 and 2020, accounts receivable-unbilled attributable to customers located in foreign countries is approximately 11% and 0% of accounts receivable-unbilled, respectively. | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of March 31, 2022 and December 31, 2021 because of their short-term nature. | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment . For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of December 31, 2021 and 2020 because of their short-term nature. The liability in connection with conversion features included within certain of the Company’s convertible notes payable was classified as a derivative liability for embedded conversion features on the balance sheets and is considered to be a Level 3 liability. |
Derivative Liability for Embedded Conversion Features | Derivative Liability for Embedded Conversion Features The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates its convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for separately. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other bifurcated embedded derivative instruments in the convertible instrument, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The result of this accounting treatment is that the fair value of the embedded derivative is recorded as a liability and marked-to-market each balance sheet date, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. | |
Recent Accounting Standards | Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies ASC 740 to reduce complexity while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for the Company for interim and annual reporting periods beginning after December 15, 2021. The Company adopted this new standard as of January 1, 2022, but it did not have a material impact on the Company’s financial statements. In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02 (“ASU 2016-02”), which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In June 2020, the FASB issued ASU No. 2020-05 (“ASU 2020-05”) which pushed back the effective date of the adoption of ASC 842 one year for private and not-for-profit entities that did not issue or serve as conduit bond obligors and had not yet adopted the standard. The new effective date was for fiscal year periods beginning after December 15, 2021. The Company adopted ASU 2016-02 effective January 1, 2022 using the Comparatives Under 840 transition method whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted within the standard, among other practical expedients which allowed the Company to carry forward prior conclusions about lease identification and classification which allows not separating lease and non-lease components and allows not recording leases with an initial term of twelve months or less on the balance sheet across all existing asset classes. Adoption of the new standard resulted in the balance sheet recognition of additional assets of $333,000 and lease liabilities of approximately $333,000. For additional information regarding the Company’s lease arrangements, see Note 6 in the notes to unaudited condensed financial statements. | Recent Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Accounting Standards Issued, Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Revenue Recognition and Accounts Receivable | Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five-step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the Company satisfies the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for the Company’s medical research customers using the Company’s proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to the Company’s customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for the Company’s customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of the Company’s proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within the Company’s network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, which can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of the Company’s revenue recognition policy. The Company has concluded that it acts as principal in the arrangement as it manages the procurement process from beginning to end and determines which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as the Company has created an asset with no alternative use to the Company which has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract, and related order upon receipt, to determine if the specimen ordered has an alternative use by us. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. In the rare circumstances where specimens do have an alternative future use, the Company's performance obligation is satisfied at the time of shipment. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which the Company has an enforceable right to payment, has been accessioned, the Company records the offset to revenue in accounts receivable — unbilled. Once the specimen has been shipped and invoiced, a reclassification is made from accounts receivable — unbilled to accounts receivable. Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. The Company has a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, the Company has given the customer a credit for the returns. The Company has not recorded a returns allowance. The following table summarizes the Company’s revenue for the three months ended March 31: 2022 2021 Specimens – contracts with customers $ 2,372,386 $ 2,947,295 Shipping and other 146,274 16,512 Revenue $ 2,518,660 $ 2,963,807 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of March 31, 2022 and December 31, 2021, the Company had an allowance for doubtful accounts of $184,837 and $269,170, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. | Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) we satisfy the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for our medical research customers using our proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to our customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for our customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of our proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within our network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of our revenue recognition policy. The Company has concluded that we act as principal in the arrangement as we manage the procurement process from beginning to end and determine which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as we have created an asset with no alternative use to the Company and has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract and related order upon receipt to determine if the specimen ordered has an alternative use by us. In the rare circumstances where specimens do have an alternative future use, our performance obligation is satisfied at the time of shipment. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which we have an enforceable right to payment, has been accessioned, we record the offset to revenue in accounts receivable — Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. We have a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, we have given the customer a credit for the returns. We have not recorded a returns allowance. The following table summarizes the Company’s revenue for the years ended December 31: 2021 2020 Specimens – contracts with customers $ 10,944,255 $ 8,086,324 Shipping and other 191,048 97,782 Revenue $ 11,135,303 $ 8,184,106 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of December 31, 2021, and 2020, the Company had an allowance for doubtful accounts of $269,170 and $108,096, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. When an item is sold or retired, the costs and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the statement of operations. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the respective assets. A summary of estimated useful lives is as follows: Asset category Estimated Useful Life Website 3 years Computer equipment and purchased software 5 years Equipment 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life of asset or lease term Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. | |
Internally Developed Software, net | Internally Developed Software, Net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology costs and are expensed to operations as incurred. | Internally Developed Software, net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology and are expensed to operations as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the three months ended March 31, 2022 and 2021. | Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the years ended December 31, 2021 and 2020. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are recorded net against the related debt and amortized to interest expense over the life of the related debt. During the years ended December 31, 2021 and 2020, amortized debt issuance costs of $875,293 and $9,185 respectively, were recorded as a component of interest expense. | |
Cost of Revenue | Cost of Revenue Cost of revenue primarily consists of the purchase price to acquire specimens from hospitals and laboratories; inbound and outbound shipping costs; supply costs related to samples; payment processing and related transaction costs; and costs paid to the supply sites to support sample collections. Shipping costs upon receipt of products from suppliers are recognized in cost of revenue. For the year ended December 31, 2021, the Company acquired approximately 11%, 11%, 10% and 10% of specimens from four vendors. For the year ended December 31, 2020, the Company acquired approximately 21% of specimens from one vendor. | |
Technology | Technology Technology costs include payroll and related expenses for employees involved in the development and implementation of iSpecimen’s technology; software license and system maintenance fees; outsourced data center costs; data management costs; depreciation and amortization; and other expenses necessary to support technology initiatives. Collectively, these costs reflect the investments the Company makes in order to offer a wide variety of products and services to customers. Technology and data costs are generally expensed as incurred. A portion of technology costs are related to research and development. Costs incurred for research and development are expensed as incurred, except for software development costs that are eligible for capitalization. Research and development costs primarily include salaries and related expenses, in addition to the cost of external service providers. For the years ended December 31, 2021, and 2020, research and development costs totaled $295,305 and $319,235, respectively. | |
Sales and Marketing | Sales and Marketing Sales and marketing costs primarily consist of payroll and related expenses for personnel engaged in marketing and selling activities, including salaries and sales commissions; travel expenses; public relations and social media costs; ispecimen.com website development and maintenance costs; search engine optimization fees; advertising costs; direct marketing costs; trade shows and events fees; marketing and customer relationship management software; and other marketing-related costs. Advertising expenses consist primarily of marketing, public relations, and promotional materials. Advertising costs are expensed as incurred and totaled $229,223 and $111,304 for the years ended December 31, 2021 and 2020, respectively. | |
Supply Development | Supply Development The Company has agreements with supply partners that allow the Company to procure specimens from them and distribute these samples to customers. Supply development costs primarily include payroll and related expenses for personnel engaged in the development and management of this supply network; related travel expenses; regulatory compliance costs to support the network; and other supply development and management costs. | |
Fulfillment | Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing operations and customer service teams, including costs attributable to assess the feasibility of specimen requests; creating and managing orders; picking non-capitalizable, packaging, and preparing customer orders for shipment; responding to inquiries from customers; and laboratory equipment and supplies. | |
General and Administrative | General and Administrative General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses for human resources, legal, finance, and executive teams; associated software licenses; facilities and equipment expenses, such as depreciation and amortization expense and rent, outside legal expenses, insurance costs, and other general and administrative costs. | |
Share-Based Compensation | Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of Company-specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 per share at March 31, 2021. Restricted Stock Units The Company recognizes share-based compensation expense from restricted stock units (the “RSUs”) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. | Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 at December 31, 2020. The Company conducted multiple valuations throughout the year ended December 31, 2020 and the estimate of the fair value of the Company’s common stock ranged from $0.39 and $3.83 as a result of the changes in the factors described above. Restricted Stock Units (RSUs) The Company recognizes share-based compensation expense from restricted stock units (RSUs) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. |
Income taxes | Income Taxes The Company provides for income taxes using the asset and liability method. The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company does not have any material uncertain tax positions for which reserves would be required. The Company will recognize interest and penalties related to uncertain tax positions, if any, in income tax expense. | |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs are included in prepaid and other current assets and consists of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the planned initial public offering. The Company had approximately $265,000 of deferred offering costs related to the IPO which were recorded in other current assets on the balance sheet as of December 31, 2020. On June 21, 2021, the Company consummated its IPO; accordingly, the Company recognized deferred initial public offering costs of approximately $0.6 million as a reduction from gross proceeds associated with the IPO through additional paid-in capital in the accompanying condensed consolidated balance sheet. The Company recorded approximately $2.3 million of offering costs in additional paid-in capital in connection with the IPO. Accordingly, there were no deferred offering costs as of December 31, 2021. | |
Common Stock Warrants | Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 7. | Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 9. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides common stock equivalents excluded from diluted net loss per share as of March 31: 2022 2021 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of RSUs 291,167 — Shares issuable upon exercise of stock options 176,142 265,102 Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants (defined below) to purchase common stock 90,000 — | Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides total shares outstanding, as of December 31: 2021 2020 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of restricted stock units 282,417 — Shares issuable upon exercise of stock options 255,147 251,847 Shares issuable upon exercise of PIPE Warrant to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants to purchase common stock 90,000 — |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Summary of entity's revenue | 2022 2021 Specimens – contracts with customers $ 2,372,386 $ 2,947,295 Shipping and other 146,274 16,512 Revenue $ 2,518,660 $ 2,963,807 | 2021 2020 Specimens – contracts with customers $ 10,944,255 $ 8,086,324 Shipping and other 191,048 97,782 Revenue $ 11,135,303 $ 8,184,106 |
Schedule of estimated useful lives | Asset category Estimated Useful Life Website 3 years Computer equipment and purchased software 5 years Equipment 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life of asset or lease term | |
Summary of total shares outstanding | 2022 2021 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of RSUs 291,167 — Shares issuable upon exercise of stock options 176,142 265,102 Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants (defined below) to purchase common stock 90,000 — | 2021 2020 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of restricted stock units 282,417 — Shares issuable upon exercise of stock options 255,147 251,847 Shares issuable upon exercise of PIPE Warrant to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants to purchase common stock 90,000 — |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | ||
Summary of property and equipment, net | March 31, December 31, 2022 2021 (unaudited) Website $ 107,927 $ 107,927 Computer equipment and purchased software 84,588 84,588 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 340,083 Accumulated depreciation (312,014) (307,302) Total property and equipment, net $ 28,069 $ 32,781 | 2021 2020 Website $ 107,927 $ 105,376 Computer equipment and purchased software 84,588 84,589 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 337,533 Accumulated depreciation (307,302) (261,944) Total property and equipment, net $ 32,781 $ 75,589 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
DEBT | |
Schedule of conversion of amended bridge notes and convertible notes | Write off of derivative liability relating to the Convertible Notes $ 2,644,000 Extinguishment of Convertible Notes principal 5,486,199 Accrued and unpaid interest on the Convertible Notes 1,257,066 Accumulated amortization on debt issuance costs 33,035 Loss on extinguishment of Convertible Notes 260,185 Write off of debt issuance costs (27,573) Write off of derivative liability relating to the Bridge Notes 2,031,300 Extinguishment of Bridge Notes principal 4,000,000 Accrued and unpaid interest on the Bridge Notes 717,646 Gain on extinguishment of Bridge Notes (9,514) Total conversion of Convertible Notes and Bridge Notes into common stock $ 16,392,344 |
Schedule of future minimum payments | Year Ending December 31, Amount Due 2022 $ — 2023 1,166,667 2024 1,400,000 2025 933,333 Total 3,500,000 Less debt issuance cost (77,384) Long-term debt, net $ 3,422,616 |
FAIR VALUE OF DERIVATIVE LIAB_2
FAIR VALUE OF DERIVATIVE LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE OF DERIVATIVE LIABILITY | |
Summary of financial liabilities measured at fair value on a recurring basis | Fair Value at December 31, 2021 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability on convertible notes payable, related parties $ — $ — $ — $ — Total liabilities $ — $ — $ — $ — Fair value at December 31, 2020 Total Level 1 Level 2 Level 3 Liabilities: Derivative liability on convertible notes payable, related parties $ 2,373,000 $ — $ — $ 2,373,000 Total liabilities $ 2,373,000 $ — $ — $ 2,373,000 |
Summary of the changes in fair value of the derivative liabilities measured on a recurring basis using significant unobservable inputs (Level 3) | 2021 2020 Balance, beginning of year $ 2,373,000 $ 2,214,000 Derivative liability on bridge notes payable and bridge notes payable, related parties 3,614,000 — (Gain) loss included in earnings (1,311,700) 159,000 Write off of derivative liabilities in connection with debt conversion (4,675,300) — Balance, end of year $ — $ 2,373,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Summary of monthly rental payments, presented by year | Year Ending December 31, Operating Leases 2022 $ 163,158 2023 165,254 2024 27,601 Total $ 356,013 |
CONVERTIBLE PREFERRED STOCK A_2
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2022 2021 Assumptions: Risk-free interest rate — 0.47% – 0.64% Expected term (in years) — 5.81 – 5.85 Expected volatility — 49.88% –49.98% Expected dividend yield — — | |
Schedule of warrant activity | Weighted Average Weighted Remaining Warrants Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2021 1,415,000 $ 9.76 5.34 Granted — — — Exercised — — — Cancelled/forfeited — — — Balance at March 31, 2022 1,415,000 $ 9.76 5.22 | |
Warrants | ||
Class of Warrant or Right [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2022 2021 Assumptions: Risk-free interest rate — 0.90% - 1.30% Expected term (in years) — 5.00 10.00 Expected volatility — 59% - 69% Expected dividend yield — — | 2021 2020 Assumptions: Risk-free interest rate 0.90% - 1.30 % — % Expected term (in years) 5.00 - 10.00 — Expected volatility 59% - 69 % — % Expected dividend yield — % — % |
Schedule of warrant activity | Weighted Average Remaining Options Weighted Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2019 — $ — — Granted 23,309 0.06 0.75 Exercised — — — Cancelled/forfeited — — — Balance at December 31, 2020 23,309 $ 0.06 0.75 Granted 1,415,000 12.77 5.34 Exercised (17,889) 0.06 — Cancelled/forfeited (5,420) 0.06 — Balance at December 31, 2021 1,415,000 $ 9.76 5.34 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2022 2021 Assumptions: Risk-free interest rate — 0.47% – 0.64% Expected term (in years) — 5.81 – 5.85 Expected volatility — 49.88% –49.98% Expected dividend yield — — | |
Schedule of summary of stock option activity | Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Granted — — — — Exercised (77,679) 1.04 — 336,632 Cancelled/forfeited (1,326) 1.00 — Balance at March 31, 2022 176,142 $ 1.18 8.01 $ 500,420 Options exercisable at March 31, 2022 135,786 $ 1.25 7.09 $ 559,850 | |
Schedule of share based compensation restricted stock units award activity | Weighted RSUs Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2021 285,542 $ 6.77 Granted 11,000 4.06 Vested (3,125) 6.28 Forfeited (2,250) 1.27 Unvested Balance at March 31, 2022 291,167 $ 6.68 | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of summary of compensation expense | 2022 Operating expenses: General and administrative $ 7,932 Sales and marketing 14,167 Fulfillment 13,631 Supply development 7,196 Technology 13,400 Total RSU expense $ 56,326 | 2021 Operating expenses: General and administrative $ 6,453 Fulfillment 21,824 Sales and marketing 25,686 Supply development 13,304 Technology 18,290 Total $ 85,557 |
Schedule of share based compensation restricted stock units award activity | Options Weighted Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2020 — $ — Granted 329,246 6.71 Vested (44,129) 6.33 Forfeited (2,700) 6.34 Unvested Balance at December 31, 2021 282,417 $ 6.78 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2021 2020 Assumptions: Risk-free interest rate 0.47% – 0.66 % 0.30% – 1.41 % Expected term (in years) 5.81 – 5.89 5.32 – 6.14 Expected volatility 49.83% –49.98 % 43.11% – 50.14 % Expected dividend yield — % — % | |
Schedule of summary of stock option activity | Weighted Average Remaining Options Weighted Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at January 1, 2019 224,884 $ 1.08 8.78 $ — Granted 43,259 1.00 — — Exercised — 1.00 — — Cancelled/forfeited (16,296) 4.20 — — Balance at December 31, 2020 251,847 $ 1.00 8.06 $ 89,100 Granted 70,164 5.74 9.34 432,520 Exercised (55,694) 1.00 — 379,276 Cancelled/forfeited (11,170) 1.00 — — Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Options exercisable at December 31, 2021 179,711 $ 1.12 7.04 $ 1,219,964 | |
Schedule of summary of compensation expense | 2022 2021 Operating expenses: General and administrative $ 26,337 $ 9,104 Sales and marketing 1,075 1,950 Fulfillment 825 1,469 Supply development 306 288 Technology 1,012 9,225 Total stock options expense $ 29,555 $ 22,036 | 2021 2020 Operating expenses: General and administrative $ 257,005 $ 38,367 Sales and marketing 55,035 8,216 Fulfillment 41,482 6,193 Supply development 8,138 1,215 Technology 260,404 38,875 Total $ 622,064 $ 92,866 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Summary of significant components of the Company's deferred tax assets and liabilities | 2021 2020 Deferred tax assets: Operating loss carryforwards $ 7,775,000 $ 6,600,000 Research and development tax credit 850,000 700,000 Other 325,000 700,000 Total deferred tax assets 8,950,000 8,000,000 Deferred tax liability: Intangibles (300,000) (250,000) Total deferred tax liabilities (300,000) (250,000) Net deferred tax assets before valuation allowance 8,650,000 7,750,000 Valuation allowance (8,650,000) (7,750,000) Net deferred tax asset $ — $ — |
Summary of reconciliation of the statutory income tax rates to the effective rates | 2021 2020 Reconciliation to statutory rates Expected federal income taxes benefit at statutory rates (21.0) % (21.0) % Expected state tax benefit at statutory rates, net of federal benefit (8.0) (8.0) Change in valuation allowance 25.7 29.0 Forgiveness of PPP Loan 3.3 — Income tax expense (benefit) — % — % |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) | Aug. 13, 2021USD ($) | Jun. 21, 2021USD ($) | Mar. 30, 2021 | Mar. 31, 2022segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) |
Nature of business | |||||||
Bridge notes payable, net of debt issuance costs | $ 4,589,228 | ||||||
Proceeds from term loan | $ 3,500,000 | 783,008 | |||||
Gain on extinguishment of note payable | $ 788,156 | $ 788,156 | |||||
Reporting units | segment | 1 | 1 | |||||
Operating segments | segment | 1 | 1 | |||||
Reverse stock split ratio | 0.18 | ||||||
Outstanding principal of convertible notes, converted | $ 5,500,000 | $ 4,000,000 | |||||
Payments on debt | 3,000,000 | ||||||
Bridge Notes | |||||||
Nature of business | |||||||
Interest expense | 1,014,657 | $ 1,607,398 | |||||
Gain on extinguishment of note payable | 2,740,425 | ||||||
Outstanding principal of convertible notes, converted | 4,000,000 | ||||||
Payments on debt | $ 3,000,000 | ||||||
Term Loan | |||||||
Nature of business | |||||||
Proceeds from term loan | $ 3,500,000 |
NATURE OF BUSINESS - Public Off
NATURE OF BUSINESS - Public Offering (Details) - USD ($) | Dec. 01, 2021 | Jul. 01, 2021 | Jun. 21, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Aug. 01, 2021 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | |||||||
Share price | $ 6.25 | ||||||
Warrants exercisable term | 9 years 7 months 13 days | ||||||
Issuance of common stock in connection with public offering | $ 18,000,000 | ||||||
Net proceeds from offering | $ 18,200,000 | ||||||
Other offering costs | 2,339,816 | ||||||
Accrued interest | 8,167 | $ 8,167 | $ 3,696,944 | ||||
Working Capital Deficit | 30,442,955 | 28,104,041 | |||||
Payment of principal to bridge note holders | (3,000,000) | ||||||
Accrued interest | 64,110 | ||||||
Accumulated deficit | 38,019,402 | 40,403,144 | 29,057,587 | ||||
Convertible Notes outstanding | $ 0 | ||||||
Number of shares issued upon conversion | 842,429 | ||||||
Cash | $ 27,738,979 | 26,099,178 | $ 695,909 | ||||
Accounts payable and accrued expenses | 1,842,481 | $ 1,321,468 | |||||
Convertible Notes | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Number of shares issued upon conversion | 1,206,614 | ||||||
Loss on conversion of notes | 300,000 | ||||||
Bridge Notes | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Payment of principal to bridge note holders | (3,000,000) | ||||||
Accrued interest | $ 717,646 | ||||||
Number of shares issued upon conversion | 842,429 | ||||||
Conversion price | $ 5.60 | $ 5.60 | |||||
Initial Public Offering | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Issuance of shares (in shares) | 2,250,000 | ||||||
Share price | $ 8 | ||||||
Issuance of common stock in connection with public offering | $ 18,000,000 | ||||||
Net proceeds from offering | 15,700,000 | ||||||
Other offering costs | $ 600,000 | ||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering (in shares) | 1,291,012 | ||||||
Temporary equity, shares outstanding (in shares) | 0 | ||||||
Underwriting Discounts | $ 1,900,000 | $ 1,700,000 | |||||
Accrued interest | $ 1,300,000 | ||||||
Conversion price | $ 5.60 | ||||||
Initial Public Offering | Bridge Notes | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Accrued interest | $ 64,110 | ||||||
Overallotment | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Issuance of shares (in shares) | 337,500 | ||||||
Share price | $ 8 | ||||||
Issuance of common stock in connection with public offering | $ 2,700,000 | ||||||
Underwriting Discounts | $ 1,900,000 | ||||||
Accrued interest | $ 700,000 | ||||||
Private Placement | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Issuance of shares (in shares) | 1,749,999 | ||||||
Share price | $ 12 | ||||||
Warrants exercisable term | 5 years 6 months | 4 years 10 months 13 days | |||||
Issuance of common stock in connection with public offering | $ 21,000,000 | ||||||
Net proceeds from offering | 21,000,000 | ||||||
Other offering costs | $ 1,435,000 | ||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering (in shares) | 1,312,500 | ||||||
Conversion price | $ 13 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2021customer | Dec. 31, 2020 | |
Revenue | Customer concentration | ||
Concentration Risk [Line Items] | ||
Number of Customers | 0 | 2 |
Revenue | Customer concentration | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | |
Revenue | Customer concentration | Customer Two | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10.00% | |
Revenue | Geographic concentration | Foreign customers | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 7.00% | 6.00% |
Account receivable | Customer concentration | ||
Concentration Risk [Line Items] | ||
Number of Customers | 1 | 1 |
Account receivable | Customer concentration | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | 10.00% |
Account receivable | Geographic concentration | Foreign customers | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 6.00% | 11.00% |
Accounts receivable-unbilled | Customer concentration | ||
Concentration Risk [Line Items] | ||
Number of Customers | 2 | 3 |
Accounts receivable-unbilled | Customer concentration | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 23.00% | 23.00% |
Accounts receivable-unbilled | Customer concentration | Customer Two | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 17.00% | 13.00% |
Accounts receivable-unbilled | Customer concentration | Customer Three | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | |
Accounts receivable-unbilled | Geographic concentration | Foreign customers | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | 0.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition and Accounts Receivable (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Right of return (in days) | 14 days | 14 days | ||
Revenue | $ 2,518,660 | $ 2,963,807 | $ 11,135,303 | $ 8,184,106 |
Accounts receivable | ||||
Allowance for doubtful accounts | 184,837 | 269,170 | 108,096 | |
Specimens | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,372,386 | 2,947,295 | 10,944,255 | 8,086,324 |
Shipping and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 146,274 | $ 16,512 | $ 191,048 | $ 97,782 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment, net (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Website | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 3 years |
Computer equipment and purchased software | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 5 years |
Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 5 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Useful life (in years) | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Internally Developed Software, net (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Internal-use software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 5 years | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($) | Jun. 21, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |
Amortized debt issuance costs | 875,293 | 9,185 | |||
Research and development costs | 295,305 | 319,235 | |||
Advertising Expense | 229,223 | 111,304 | |||
Deferred Costs | |||||
Deferred Offering Costs | $ 2,300,000 | $ 0 | $ 265,000 | ||
Deferred initial public offering costs | $ 600,000 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cost of Revenue (Details) - Cost of Revenue - Vendor concentration | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||
Number of vendors | 4 | 1 |
Vendor One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | 21.00% |
Vendor Two | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | |
Vendor Three | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10.00% | |
Vendor Four | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10.00% |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share Based Compensation (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, fair value (per share) | $ 3.83 | $ 3.83 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, fair value (per share) | 0.39 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, fair value (per share) | $ 3.83 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shares issuable upon conversion of preferred stock (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issuable upon conversion of preferred stock | 1,291,012 | 1,291,012 | ||
Shares Issuable Upon Vesting Of RSUs | 291,167 | 282,417 | ||
Shares issuable upon exercise of stock options | 176,142 | 265,102 | 255,147 | 251,847 |
Shares issuable upon exercise of warrants | 1,312,500 | 1,312,500 | ||
Lender | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issuable upon exercise of Warrant to purchase common stock | 12,500 | 23,309 | 12,500 | 23,309 |
Underwriter Warrants | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issuable upon exercise of Warrant to purchase common stock | 90,000 | 90,000 |
FACTORING OF ACCOUNTS RECEIVA_2
FACTORING OF ACCOUNTS RECEIVABLE (Details) - Versant Funding LLC - USD ($) | Jun. 30, 2021 | Dec. 31, 2021 | Jul. 31, 2021 | Jan. 01, 2021 |
FACTORING OF ACCOUNTS RECEIVABLE | ||||
Minimum accounts receivable without recourse, the entity has agreed to sell | $ 1,200,000 | |||
Total receivables sold under the Factoring Agreement | $ 3,400,000 | |||
Payments made for termination of factoring agreement | $ 139,374 | |||
Additional amount of Factoring Accounts Receivable | $ 214,497 | |||
Factoring fees paid | $ 298,000 | |||
Minimum | ||||
FACTORING OF ACCOUNTS RECEIVABLE | ||||
Factoring fees (as a percent) | 2.50% | |||
Maximum | ||||
FACTORING OF ACCOUNTS RECEIVABLE | ||||
Factoring fees (as a percent) | 15.00% |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
PP&E, Net, by Type | ||||
Property and equipment, gross | $ 340,083 | $ 340,083 | $ 337,533 | |
Accumulated depreciation | (312,014) | (307,302) | (261,944) | |
Total property and equipment, net | 28,069 | 32,781 | 75,589 | |
Depreciation of property and equipment | 4,712 | $ 11,130 | 45,358 | 44,758 |
Website | ||||
PP&E, Net, by Type | ||||
Property and equipment, gross | 107,927 | 107,927 | 105,376 | |
Computer equipment and purchased software | ||||
PP&E, Net, by Type | ||||
Property and equipment, gross | 84,588 | 84,588 | 84,589 | |
Equipment | ||||
PP&E, Net, by Type | ||||
Property and equipment, gross | 35,449 | 35,449 | 35,449 | |
Furniture and fixtures | ||||
PP&E, Net, by Type | ||||
Property and equipment, gross | 87,184 | 87,184 | 87,184 | |
Leasehold improvements | ||||
PP&E, Net, by Type | ||||
Property and equipment, gross | $ 24,935 | $ 24,935 | $ 24,935 |
INTERNALLY DEVELOPED SOFTWARE_2
INTERNALLY DEVELOPED SOFTWARE, NET (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
INTERNALLY DEVELOPED SOFTWARE, NET | ||||
Internally developed software capitalized | $ 339,162 | $ 214,534 | $ 1,035,367 | $ 1,102,186 |
Amortization expense | $ 266,219 | $ 235,229 | 958,639 | 774,929 |
Accumulated amortization | $ 3,833,904 | $ 2,875,264 |
DEBT (Details)
DEBT (Details) - USD ($) | Jan. 13, 2021 | May 31, 2020 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
DEBT | |||||
Proceeds from term loan | $ 3,500,000 | $ 783,008 | |||
Gain on extinguishment of note payable | $ 788,156 | 788,156 | |||
Paycheck Protection Program, Cares Act | |||||
DEBT | |||||
Proceeds from term loan | $ 783,008 | ||||
Interest expense | $ 279 | $ 5,127 | |||
Gain on extinguishment of note payable | $ 788,156 |
DEBT - Related Party Convertibl
DEBT - Related Party Convertible Notes Payable (Details) | Jun. 21, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018USD ($)item | Mar. 31, 2022USD ($) |
DEBT | |||||||
Outstanding principal of convertible notes, converted | $ 5,500,000 | $ 4,000,000 | |||||
Debt issuance costs | $ 77,384 | $ 74,336 | |||||
Convertible Notes To Related Parties | |||||||
DEBT | |||||||
Outstanding principal of convertible notes, converted | $ 5,491,663 | $ 5,500,000 | |||||
Interest rate (as a percent) | 6.00% | 6.00% | |||||
Minimum gross proceeds from equity financing required for conversion of debt | $ 10,000,000 | ||||||
Number of consecutive quarters for achievement of positive free cash flow from operations required for conversion of debt | item | 2 | ||||||
Term prior to maturity date for achievement of positive free cash flow from operations required for conversion of debt | 90 days | 90 days | |||||
Conversion rates | 30.00% | 30.00% | |||||
Interest expense | $ 156,411 | $ 330,904 | |||||
Debt issuance costs | 0 | 9,189 | |||||
Debt discounts | 0 | 0 | |||||
Amortization of debt discounts | $ 1,088 | $ 141,628 |
DEBT - Conversion of Convertibl
DEBT - Conversion of Convertible Notes Payable (Details) - USD ($) | Jun. 21, 2021 | Dec. 31, 2021 | Dec. 31, 2018 |
DEBT | |||
Outstanding principal of convertible notes, converted | $ 5,500,000 | $ 4,000,000 | |
Accrued interest | $ 64,110 | ||
Number of shares issued upon conversion | 842,429 | ||
Convertible Notes outstanding | $ 0 | ||
Convertible Notes | |||
DEBT | |||
Number of shares issued upon conversion | 1,206,614 | ||
Loss on conversion of notes | 300,000 | ||
Convertible Notes To Related Parties | |||
DEBT | |||
Outstanding principal of convertible notes, converted | $ 5,491,663 | $ 5,500,000 | |
Accrued interest | $ 1,257,066 | ||
Conversion price | $ 5.60 | ||
Convertible Notes outstanding | 0 | ||
Loss on conversion of notes | $ 260,000 |
DEBT - Bridge Financing (Detail
DEBT - Bridge Financing (Details) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | Oct. 01, 2020 | Sep. 30, 2020 | Dec. 31, 2018 | |
DEBT | ||||||
Debt issuance costs | $ 77,384 | $ 74,336 | ||||
Bridge Notes | ||||||
DEBT | ||||||
Face amount of debt | $ 3,500,000 | $ 7,000,000 | ||||
Interest rate | 15.00% | 30.00% | 24.00% | |||
Interest expense | $ 1,014,657 | $ 1,607,398 | ||||
Debt issuance costs | 0 | 5,771 | ||||
Related party interest expense | 320,469 | $ 446,660 | ||||
Minimum Gross Proceeds From Equity Financing Required For Conversion Of Debt | $ 18,000,000 | |||||
Percentage of outstanding unpaid principal, holders may elect to convert | 50.00% | |||||
Discount rate on issue price of stock in elective conversion stock | 30.00% | |||||
Number of times of third party loan proceeds | 1.50 | |||||
Related Party Bridge Notes | ||||||
DEBT | ||||||
Face amount of debt | $ 1,905,000 | |||||
Minimum | Bridge Notes | ||||||
DEBT | ||||||
Interest rate | 24.00% |
DEBT - Bridge Financing - Autom
DEBT - Bridge Financing - Automatic Conversion or Debt Extension (Details) - Bridge Notes | 12 Months Ended | ||
Dec. 31, 2021 | Oct. 01, 2020 | Sep. 30, 2020 | |
Debt Instrument [Line Items] | |||
Discount rate on issue price of stock in automatic conversion stock | 10.00% | ||
Rate on issue price of stock in automatic conversion stock | 90.00% | ||
Minimum percentage of repayments of total adjusted outstanding principal for automatic conversion | 25.00% | ||
Interest rate | 15.00% | 30.00% | 24.00% |
Maturity term | 18 months |
DEBT - Bridge Financing - Debt
DEBT - Bridge Financing - Debt Extinguishment (Details) - USD ($) | Jun. 21, 2021 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 |
Debt Instrument [Line Items] | |||||
Gain on extinguishment of note payable | $ 788,156 | $ 788,156 | |||
Write-off of debt issuance cost | 27,573 | ||||
Debt issuance costs | 77,384 | $ 74,336 | |||
Outstanding principal of convertible notes, converted | $ 5,500,000 | 4,000,000 | |||
Accrued interest | $ 64,110 | ||||
Number of shares issued upon conversion | 842,429 | ||||
Conversion of principal and accrued interest of convertible notes and bridge notes into common stock upon initial public offering | $ 16,392,344 | ||||
Bridge Notes | |||||
Debt Instrument [Line Items] | |||||
Gain on extinguishment of note payable | 2,740,425 | ||||
Write-off of debt issuance cost | 5,700 | ||||
Debt discounts | 869,600 | ||||
Related party interest expense | 320,469 | $ 446,660 | |||
Interest expense | 1,014,657 | 1,607,398 | |||
Debt issuance costs | 0 | 5,771 | |||
Amortization of the debt discount | 869,600 | $ 136,185 | |||
Outstanding principal of convertible notes, converted | 4,000,000 | ||||
Accrued interest | $ 717,646 | ||||
Number of shares issued upon conversion | 842,429 | ||||
Conversion price | $ 5.60 | $ 5.60 | |||
Gain On Conversion | $ 9,746 |
DEBT - Bridge Financing - Compo
DEBT - Bridge Financing - Components of non-cash transaction (Details) | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Debt Instrument [Line Items] | |
Accumulated amortization on debt issuance costs | $ 33,035 |
Write off of debt issuance cost | (27,573) |
Total conversion of Convertible Notes and Bridge Notes into common stock | 16,392,344 |
Payments on debt | 3,000,000 |
Accrued interest | 64,110 |
Convertible Notes | |
Debt Instrument [Line Items] | |
Write off of derivative liability relating to the Convertible Notes | 2,644,000 |
Extinguishment of Convertible Notes principal | 5,486,199 |
Accrued and unpaid interest on the Convertible Notes | 1,257,066 |
Loss on extinguishment of Convertible Notes | 260,185 |
Bridge Notes | |
Debt Instrument [Line Items] | |
Write off of derivative liability relating to the Convertible Notes | (2,031,300) |
Extinguishment of Convertible Notes principal | 4,000,000 |
Accrued and unpaid interest on the Convertible Notes | 717,646 |
Loss on extinguishment of Convertible Notes | (9,514) |
Write off of debt issuance cost | (5,700) |
Payments on debt | 3,000,000 |
Accrued interest | 717,646 |
Bridge notes outstanding | $ 0 |
DEBT - Term Loan (Details)
DEBT - Term Loan (Details) - USD ($) | Mar. 10, 2023 | Aug. 13, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 |
Debt Instrument [Line Items] | |||||||
Proceeds from term loan | $ 3,500,000 | $ 783,008 | |||||
Outstanding principal balance on the Term Loan | $ 3,425,664 | 3,422,616 | |||||
Interest expense | 38,048 | $ 853,147 | 2,102,681 | 2,096,795 | |||
Debt issuance costs | $ 74,336 | 77,384 | |||||
Issuance of common stock warrants in connection with Term Loan | 49,072 | ||||||
Payment of debt issuance costs in connection with note payable | 32,917 | ||||||
Amortized debt issuance costs | $ 875,293 | 9,185 | |||||
Prime Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread rate | 0.75% | 0.75% | |||||
Interest rate on the loan | 3.25% | 3.25% | |||||
Lender | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 81,989 | $ 81,989 | |||||
Warrants to purchase common stock issued | 12,500 | 12,500 | |||||
Issuance of common stock warrants in connection with Term Loan | $ 49,072 | $ 49,072 | |||||
Payment of debt issuance costs in connection with note payable | 23,066 | 23,066 | |||||
Legal costs | 9,851 | $ 9,851 | |||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from term loan | $ 3,500,000 | ||||||
Unused borrowing amount | $ 1,500,000 | $ 1,500,000 | |||||
Interest rate on the loan | 4.00% | 4.00% | |||||
Calendar day to pay interest | 10 days | ||||||
Calendar day to pay principal | 30 days | ||||||
Interest expense | $ 35,000 | $ 47,444 | 0 | ||||
Amortized debt issuance costs | 3,048 | 5,175 | 0 | ||||
Unamortized debt issuance costs | $ 74,336 | $ 77,384 | $ 0 |
DEBT - Future Minimum Payments
DEBT - Future Minimum Payments (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
DEBT | ||
2023 | $ 1,400,000 | $ 1,166,667 |
2024 | 933,333 | 1,400,000 |
2025 | 933,333 | |
Long-term Debt, Gross | 3,500,000 | 3,500,000 |
Debt Issuance Costs, Net | 74,336 | 77,384 |
Outstanding principal balance on the Term Loan | $ 3,425,664 | $ 3,422,616 |
FAIR VALUE OF DERIVATIVE LIAB_3
FAIR VALUE OF DERIVATIVE LIABILITY - Derivative liabilities (Details) - Recurring - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Liabilities: | ||
Derivative liability | $ 0 | |
Convertible Notes Payable Related Party | ||
Liabilities: | ||
Derivative liability | 0 | $ 2,373,000 |
Level 1 | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 1 | Convertible Notes Payable Related Party | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 2 | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 2 | Convertible Notes Payable Related Party | ||
Liabilities: | ||
Derivative liability | 0 | 0 |
Level 3 | ||
Liabilities: | ||
Derivative liability | 0 | |
Level 3 | Convertible Notes Payable Related Party | ||
Liabilities: | ||
Derivative liability | $ 0 | $ 2,373,000 |
FAIR VALUE OF DERIVATIVE LIAB_4
FAIR VALUE OF DERIVATIVE LIABILITY - Changes in fair value of the derivative liabilities measured on a recurring basis (Details) - Derivative Financial Instruments, Liabilities [Member] - Level 3 - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of year | $ 2,373,000 | $ 2,214,000 |
Derivative liability on bridge notes payable and bridge notes payable, related parties | 3,614,000 | |
(Gain) loss included in earnings | (1,311,700) | 159,000 |
Write off of derivative liabilities in connection with debt conversion | $ (4,675,300) | |
Balance, end of year | $ 2,373,000 |
FAIR VALUE OF DERIVATIVE LIAB_5
FAIR VALUE OF DERIVATIVE LIABILITIES - Additional Information (Details) - Initial Public Offering - USD ($) | Jun. 21, 2021 | Dec. 31, 2021 |
Convertible Notes Payable Related Party | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Gain (loss) on derivative liability of fair value | $ 117,000 | |
Bridge Notes | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Gain (loss) on derivative liability of fair value | $ 1,630,700 | |
Write off of derivative liability relating to the Convertible Notes | $ 2,031,300 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Leases | ||||
2022 | $ 165,254 | $ 163,158 | ||
2023 | 27,601 | 165,254 | ||
2024 | 27,601 | |||
Total future minimum lease payments | 315,486 | 356,013 | ||
Rent expense | $ 44,957 | $ 40,178 | $ 167,167 | $ 136,281 |
CONVERTIBLE PREFERRED STOCK A_3
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (Details) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
STOCKHOLDERS' EQUITY | |||
Number of shares authorized | 250,000,000 | 250,000,000 | |
Common stock, shares authorized | 200,000,000 | 200,000,000 | 16,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
CONVERTIBLE PREFERRED STOCK A_4
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - Redeemable Convertible Preferred Stock - (Details) - shares | Dec. 31, 2021 | Jun. 21, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Class of Stock [Line Items] | ||||
Convertible preferred stock, shares issued upon conversion | 1,291,012 | 1,291,012 | ||
Initial Public Offering | ||||
Class of Stock [Line Items] | ||||
Outstanding preferred stock | 0 | 1,291,012 | ||
Convertible preferred stock, shares issued upon conversion | 1,291,012 |
CONVERTIBLE PREFERRED STOCK A_5
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDER'S DEFICIT - Common Stock - (Details) - USD ($) | Dec. 01, 2021 | Aug. 01, 2021 | Jul. 01, 2021 | Jun. 21, 2021 | Dec. 31, 2021 |
Class of Stock [Line Items] | |||||
Net proceeds from issuance of shares | $ 18,000,000 | ||||
Number of shares issued upon conversion | 842,429 | ||||
Net proceeds from offering | $ 18,200,000 | ||||
Share price | $ 6.25 | ||||
Equity issuance costs | $ 2,339,816 | ||||
Issuance of common stock in connection with public offering | 18,000,000 | ||||
Shares issued in exchange for investor relation services (in shares) | 2,000 | ||||
Shares issued in exchange for investor relation services | $ 12,500 | $ 12,500 | |||
Overallotment | |||||
Class of Stock [Line Items] | |||||
Net proceeds from issuance of shares | $ 2,500,000 | ||||
Issuance of shares (in shares) | 337,500 | ||||
Underwriting Discounts | $ 1,900,000 | ||||
Underwriting discounts | $ 200,000 | ||||
Share price | $ 8 | ||||
Issuance of common stock in connection with public offering | $ 2,700,000 | ||||
Initial Public Offering | |||||
Class of Stock [Line Items] | |||||
Issuance of shares (in shares) | 2,250,000 | ||||
Underwriting Discounts | $ 1,900,000 | $ 1,700,000 | |||
Net proceeds from offering | $ 15,700,000 | ||||
Share price | $ 8 | ||||
Equity issuance costs | $ 600,000 | ||||
Issuance of common stock in connection with public offering | $ 18,000,000 | ||||
Private Placement | |||||
Class of Stock [Line Items] | |||||
Net proceeds from issuance of shares | $ 19,600,000 | ||||
Issuance of shares (in shares) | 1,749,999 | ||||
Placement agent commissions | $ 1,260,000 | ||||
Net proceeds from offering | $ 21,000,000 | ||||
Share price | $ 12 | ||||
Equity issuance costs | $ 1,435,000 | ||||
Issuance of common stock in connection with public offering | $ 21,000,000 | ||||
Warrants to purchase shares of common stock | 1,312,500 | ||||
Bridge Notes | |||||
Class of Stock [Line Items] | |||||
Number of shares issued upon conversion | 842,429 | ||||
Bridge Notes | Initial Public Offering | |||||
Class of Stock [Line Items] | |||||
Outstanding principal and accrued interest converted | $ 4,700,000 | ||||
Convertible Notes. | Initial Public Offering | |||||
Class of Stock [Line Items] | |||||
Number of shares issued upon conversion | 842,429 |
CONVERTIBLE PREFERRED STOCK A_6
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - Underwriter Warrants (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Dec. 31, 2020 | |
Class of Warrant or Right [Line Items] | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Warrants exercisable term | 9 years 7 months 13 days | |||
Equity issuance costs | $ 2,339,816 | |||
Underwriter Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants to purchase shares of common stock | 90,000 | 90,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Exercise price of warrant | $ 0.64 | $ 10 | $ 10 | |
Warrants exercisable term | 4 years 2 months 15 days | 4 years 6 months | ||
Commencing term from effective date of registration statement | 180 days | 180 days | ||
Equity issuance costs | $ 400,000 | $ 400,000 |
CONVERTIBLE PREFERRED STOCK A_7
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - Warrants (Details) - USD ($) | Aug. 13, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Dec. 01, 2021 |
Class of Warrant or Right [Line Items] | ||||
Warrants exercisable term | 9 years 7 months 13 days | |||
Issuance of common stock through exercise of warrants | $ 992 | |||
Private Placement | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants exercisable term | 4 years 10 months 13 days | 5 years 6 months | ||
Warrants to purchase shares of common stock | 1,312,500 | |||
Exercise price of warrant | $ 12.06 | $ 13 | ||
Warrants other than Underwriter Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants exercisable term | 9 years 4 months 17 days | |||
Warrants to purchase shares of common stock | 12,500 | 17,889 | ||
Exercise price of warrant | $ 8 | $ 12.06 | ||
Issuance of common stock through exercise of warrants (in shares) | 17,889 | |||
Issuance of common stock through exercise of warrants | $ 992 | |||
Warrant to purchase common stock shares issued | 12,500 |
CONVERTIBLE PREFERRED STOCK A_8
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - Estimate the fair value of warrants granted (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, minimum | 0.47% | 0.47% | 0.30% |
Risk-free interest rate, maximum | 0.64% | 0.66% | 1.41% |
Expected volatility, minimum | 49.88% | 49.83% | 43.11% |
Expected volatility, maximum | 49.98% | 49.98% | 50.14% |
Minimum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Expected term (in years) | 5 years 9 months 21 days | 5 years 9 months 21 days | 5 years 3 months 25 days |
Maximum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Expected term (in years) | 5 years 10 months 6 days | 5 years 10 months 20 days | 6 years 1 month 20 days |
Warrants | |||
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, minimum | 0.90% | ||
Risk-free interest rate, maximum | 1.30% | ||
Expected volatility, minimum | 59.00% | ||
Expected volatility, maximum | 69.00% | ||
Warrants | Minimum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, minimum | 0.90% | ||
Expected term (in years) | 5 years | 5 years | |
Expected volatility, minimum | 59.00% | ||
Warrants | Maximum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, maximum | 1.30% | ||
Expected term (in years) | 10 years | 10 years | |
Expected volatility, maximum | 69.00% |
CONVERTIBLE PREFERRED STOCK A_9
CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - Warrant activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options Outstanding. | ||||
Balance at the beginning | 255,147 | 251,847 | 251,847 | |
Exercised | (77,679) | |||
Balance at the end | 176,142 | 265,102 | 255,147 | 251,847 |
Warrants | ||||
Options Outstanding. | ||||
Balance at the beginning | 1,415,000 | 23,309 | 23,309 | |
Granted | 1,415,000 | 23,309 | ||
Exercised | (17,889) | |||
Cancelled/forfeited | (5,420) | |||
Balance at the end | 1,415,000 | 1,415,000 | 23,309 | |
Weighted Average Exercise Price | ||||
Balance at the beginning (in dollars per share) | $ 9.76 | $ 0.06 | $ 0.06 | |
Granted (in dollars per share) | 12.77 | $ 0.06 | ||
Exercised (in dollars per share) | 0.06 | |||
Cancelled/forfeited (in dollars per share) | 0.06 | |||
Balance at the end (in dollars per share) | $ 9.76 | $ 9.76 | $ 0.06 | |
Weighted Average Remaining Contractual Term (in years) | ||||
Weighted Average Remaining Contractual Term (in years) | 5 years 2 months 19 days | 5 years 4 months 2 days | 9 months | |
Granted (in years) | 5 years 4 months 2 days | 9 months |
SHARE-BASED COMPENSATION (Detai
SHARE-BASED COMPENSATION (Details) - shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Jun. 16, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options authorized | 608,000 | ||
Sharebased compensation, shares issued | 11,000 | ||
2013 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common Stock, Capital Shares Reserved for Future Issuance | 112,206 | 226,164 | |
2021 Stock Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options authorized | 608,000 | ||
Sharebased compensation, shares issued | 381,836 | ||
Common Stock, Capital Shares Reserved for Future Issuance | 217,414 | 105,845 |
SHARE-BASED COMPENSATION - Esti
SHARE-BASED COMPENSATION - Estimate the fair value of stock options (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, minimum | 0.47% | 0.47% | 0.30% |
Risk-free interest rate, maximum | 0.64% | 0.66% | 1.41% |
Expected volatility, minimum | 49.88% | 49.83% | 43.11% |
Expected volatility, maximum | 49.98% | 49.98% | 50.14% |
Minimum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Expected term (in years) | 5 years 9 months 21 days | 5 years 9 months 21 days | 5 years 3 months 25 days |
Maximum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Expected term (in years) | 5 years 10 months 6 days | 5 years 10 months 20 days | 6 years 1 month 20 days |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock option activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Options Outstanding | |||||
Balance at the beginning | 255,147 | 251,847 | 251,847 | ||
Exercised | (77,679) | ||||
Balance at the end | 176,142 | 265,102 | 255,147 | 251,847 | |
2013 and 2021 Stock Incentive Plan | |||||
Options Outstanding | |||||
Balance at the beginning | 255,147 | 251,847 | 251,847 | 224,884 | |
Granted | 70,164 | 43,259 | |||
Exercised | (77,679) | (55,694) | |||
Cancelled/forfeited | (1,326) | (11,170) | (16,296) | ||
Balance at the end | 176,142 | 255,147 | 251,847 | 224,884 | |
Options exercisable at the end | 135,786 | 179,711 | |||
Weighted Average Exercise Price | |||||
Balance at the beginning (in dollars per share) | $ 2.32 | $ 1 | $ 1 | $ 1.08 | |
Granted (in dollars per share) | 5.74 | 1 | |||
Exercised (in dollars per share) | 1.04 | $ 0 | 1 | 1 | |
Cancelled/forfeited (in dollars per share) | 1 | 1 | 4.20 | ||
Balance at the end (in dollars per share) | 1.18 | 2.32 | $ 1 | $ 1.08 | |
Options exercisable at the end (in dollars per share) | $ 1.25 | $ 1.12 | |||
Weighted Average Remaining Contractual Term (in years) | |||||
Weighted Average Remaining Contractual Term (in years) | 8 years 3 days | 7 years 9 months | 8 years 21 days | 8 years 9 months 10 days | |
Granted (in years) | 9 years 4 months 2 days | ||||
Options exercisable at the end (in years) | 7 years 1 month 2 days | 7 years 14 days | |||
Share Based Compensation Arrangement By Share Based Payment Award Options Aggregate Intrinsic Value | |||||
Balance at the beginning (in dollars) | $ 1,550,409 | $ 89,100 | $ 89,100 | ||
Granted (in dollars) | 432,520 | ||||
Exercised (in dollars) | 336,632 | (379,276) | |||
Balance at the end (in dollars) | 500,420 | 1,550,409 | $ 89,100 | ||
Options exercisable at the end (in dollars) | $ 559,850 | $ 1,219,964 |
SHARE-BASED COMPENSATION - Outs
SHARE-BASED COMPENSATION - Outstanding principal and all unpaid and accrued interest (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
SHARE-BASED COMPENSATION | ||||
Total intrinsic value of stock options exercised | $ 379,276 | $ 0 | ||
Weighted-average grant date fair value | $ 0 | $ 1.77 | $ 3.94 | $ 0.55 |
Unamortized compensation expense | $ 212,195 | $ 432,520 | ||
Unamortized compensation expense recognized over the remaining requisite service period | 2 years 1 month 6 days | 2 years 4 months 24 days | ||
Proceeds from exercise of stock options | $ 75,277 | $ 58,648 | $ 0 |
SHARE-BASED COMPENSATION - Addi
SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 16, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Sharebased compensation, shares issued | 11,000 | |||
Options authorized | 608,000 | |||
Performance Stock Units | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Compensation expense | $ 0 | $ 0 | ||
Sharebased compensation, shares issued | 47,349 | 47,349 | ||
Vesting period | 4 years | |||
2021 Stock Incentive Plan | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Sharebased compensation, shares issued | 381,836 | |||
Options authorized | 608,000 |
SHARE-BASED COMPENSATION - Comp
SHARE-BASED COMPENSATION - Compensation Expense (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted Stock Units | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | $ 56,326 | $ 85,557 | ||
Restricted Stock Units | General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 7,932 | 6,453 | ||
Restricted Stock Units | Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 14,167 | 25,686 | ||
Restricted Stock Units | Fulfillment | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 13,631 | 21,824 | ||
Restricted Stock Units | Supply development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 7,196 | 13,304 | ||
Restricted Stock Units | Technology | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 13,400 | 18,290 | ||
Stock Options | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 29,555 | $ 22,036 | 622,064 | $ 92,866 |
Stock Options | General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 26,337 | 9,104 | 257,005 | 38,367 |
Stock Options | Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 1,075 | 1,950 | 55,035 | 8,216 |
Stock Options | Fulfillment | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 825 | 1,469 | 41,482 | 6,193 |
Stock Options | Supply development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 306 | 288 | 8,138 | 1,215 |
Stock Options | Technology | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | $ 1,012 | $ 9,225 | $ 260,404 | $ 38,875 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 1 month 6 days | 2 years 4 months 24 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 189,396 | 11,000 | 0 | ||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 56,326 | $ 85,557 | |||
Awards vesting rights percentage | 25.00% | ||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 835,347 | $ 845,933 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 4 months 24 days | 3 years 6 months 7 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | ||||
Restricted Stock Units | Executive Officer and immediate family | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Awards vesting rights percentage | 20.00% | ||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 806,216 | $ 727,261 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 5 months 19 days | 3 years 2 months 23 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 189,396 | ||||
Restricted Stock Units | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 19,356 | ||||
Vesting period | 1 year | ||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 45,379 | $ 26,023 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 6 months | 3 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 12,500 | ||||
Restricted Stock Units | Share-based Payment Arrangement, Tranche One [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | 1 year | |||
Awards vesting rights percentage | 25.00% | ||||
Restricted Stock Units | Share-based Payment Arrangement, Tranche Two [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | 3 years | |||
General and administrative | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 7,932 | $ 6,453 | |||
General and administrative | Restricted Stock Units | Executive Officer and immediate family | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 394,555 | 78,955 | |||
General and administrative | Restricted Stock Units | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 33,121 | ||||
Fulfillment | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 13,631 | 21,824 | |||
Sales and marketing | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 14,167 | 25,686 | |||
Supply development | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 7,196 | 13,304 | |||
Technology | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 13,400 | $ 18,290 | |||
Share-based Payment Arrangement, Employee [Member] | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 127,350 |
SHARE-BASED COMPENSATION - Unve
SHARE-BASED COMPENSATION - Unvested Restricted Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options outstanding | ||||
Unvested Balance at December 31, 2021 | 285,542 | 329,246 | ||
Granted | 189,396 | 11,000 | 0 | |
Vested | $ (3,125) | $ (44,129) | ||
Forfeited | (2,250) | (2,700) | ||
Unvested Balance at March 31, 2022 | 291,167 | 285,542 | 329,246 | |
Weighted Average Grant Date Fair Value | ||||
Unvested Balance at December 31, 2021 | $ 6.78 | $ 6.71 | ||
Granted | 4.06 | 6.33 | ||
Vested | 6.28 | 6.34 | ||
Forfeited | 1.27 | 6.78 | ||
Unvested Balance at March 31, 2022 | $ 6.68 | $ 6.78 | $ 6.71 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 900,000 | ||
Provision for income taxes | 0 | $ 0 | |
Tax Credit Carryforward, Amount | 850,000 | 179,000 | $ 900,000 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 30,300,000 | 32,500,000 | |
Net operating loss carryforwards, subject to expiration | 13,000,000 | 13,000,000 | |
Net operating loss carryforwards, carried forward indefinitely | 17,300,000 | 19,500,000 | |
Tax Credit Carryforward, Amount | $ 850,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 22,400,000 | $ 23,400,000 |
INCOME TAXES - Significant comp
INCOME TAXES - Significant components of the Company's deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Operating loss carryforwards | $ 7,775,000 | $ 6,600,000 |
Research and development tax credit | 850,000 | 700,000 |
Other | 325,000 | 700,000 |
Total deferred tax assets | 8,950,000 | 8,000,000 |
Deferred tax liability: | ||
Intangibles | (300,000) | (250,000) |
Total deferred tax liabilities | (300,000) | (250,000) |
Net deferred tax assets before valuation allowance | 8,650,000 | 7,750,000 |
Valuation allowance | $ (8,650,000) | $ (7,750,000) |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of the statutory income tax rates (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation to statutory rates | ||
Expected federal income taxes benefit at statutory rates | (21.00%) | (21.00%) |
Expected state tax benefit at statutory rates, net of federal benefit | (8.00%) | (8.00%) |
Change in valuation allowance | 25.70% | 29.00% |
Forgiveness of PPP Loan | 3.30% |
EMPLOYEE BENEFITS PLAN (Details
EMPLOYEE BENEFITS PLAN (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
EMPLOYEE BENEFITS PLAN | ||
Employer matching contribution | $ 0 | $ 0 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 26,099,178 | $ 27,738,979 |
Accounts receivable - unbilled | 1,258,515 | 1,739,020 |
Accounts receivable, net of allowance for doubtful accounts of $184,837 and $269,170 at March 31, 2022 and December 31, 2021, respectively | 2,356,688 | 3,002,442 |
Prepaid expenses and other current assets | 295,750 | 327,035 |
Tax credit receivable, current portion | 140,873 | 140,873 |
Total current assets | 30,151,004 | 32,948,349 |
Property and equipment, net | 28,069 | 32,781 |
Internally developed software, net | 2,783,810 | 2,710,867 |
Operating lease right-of-use asset | 296,832 | |
Security deposits | 27,601 | 27,601 |
Total assets | 33,287,316 | 35,719,598 |
Current liabilities: | ||
Accounts payable | 281,494 | 832,678 |
Accrued expenses | 1,039,974 | 1,009,803 |
Accrued interest | 8,167 | 8,167 |
Operating lease current obligation | 150,007 | |
Deferred revenue | 567,321 | 654,746 |
Total current liabilities | 2,046,963 | 2,505,394 |
Operating lease long-term obligation | 147,375 | |
Term loan, net of discount | 3,425,664 | 3,422,616 |
Total liabilities | 5,620,002 | 5,928,010 |
Commitments and contingencies (See Note 6) | ||
Stockholders' equity | ||
Common stock, $0.0001 par value, 200,000,000 shares authorized, 8,845,283 issued, and 8,814,283 outstanding at March 31, 2022 and 8,764,479 issued and 8,733,479 outstanding at December 31, 2021 | 881 | 873 |
Additional paid-in capital | 68,069,749 | 67,810,289 |
Treasury stock, 31,000 shares at March 31, 2022 and December 31, 2021, at cost | (172) | (172) |
Accumulated deficit | (40,403,144) | (38,019,402) |
Total stockholders' equity | 27,667,314 | 29,791,588 |
Total liabilities and stockholders' equity | $ 33,287,316 | $ 35,719,598 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
CONDENSED BALANCE SHEETS | |||
Allowance for doubtful accounts | $ 184,837 | $ 269,170 | $ 108,096 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 200,000,000 | 200,000,000 | 16,000,000 |
Common stock, issued (in shares) | 8,845,283 | 8,764,479 | 967,213 |
Common stock, outstanding (in shares) | 8,814,283 | 8,733,479 | 936,213 |
Treasury Stock, Shares | 31,000 | 31,000 | 31,000 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
CONDENSED STATEMENTS OF OPERATIONS | |
Revenue | $ 8,184,106 |
Operating expenses: | |
Cost of revenue | 3,585,477 |
Technology | 1,465,348 |
Sales and marketing | 1,783,563 |
Supply development | 497,182 |
Fulfillment | 859,643 |
General and administrative | 2,399,273 |
Total operating expenses | 10,590,486 |
Loss from operations | (2,406,380) |
Other income (expense), net | |
Interest expense | (2,096,795) |
Interest income | 437 |
Change in fair value of derivative liability on convertible notes | (159,000) |
Other income | 9,654 |
Other expense, net | (2,245,704) |
Net loss | $ (4,652,084) |
Net loss per share | |
Basic (in dollars per share) | $ / shares | $ (4.97) |
Diluted (in dollars per share) | $ / shares | $ (4.97) |
Weighted average shares of common stock outstanding | |
Basic (in shares) | shares | 936,213 |
Diluted (in shares) | shares | 936,213 |
CONDENSED STATEMENTS OF CHANGES
CONDENSED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Deficit) - USD ($) | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Preferred StockSeries B Convertible Preferred Stock | Preferred StockSeries A-1 Convertible Preferred Stock | Preferred StockSeries A Convertible Preferred Stock | Series B Convertible Preferred Stock | Series A-1 Convertible Preferred Stock | Series A Convertible Preferred Stock | Total |
Balance at the beginning (in shares) at Dec. 31, 2019 | 572,465 | 100,365 | 618,182 | ||||||||
Balance at the beginning at Dec. 31, 2019 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | ||||||||
Balances at the end (in shares) at Dec. 31, 2020 | 572,465 | 100,365 | 618,182 | 572,465 | 100,365 | 618,182 | |||||
Balances at the end at Dec. 31, 2020 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | $ 11,173,076 | ||||
Balance at the beginning (in shares) at Dec. 31, 2019 | 936,213 | 31,000 | |||||||||
Balance at the beginning at Dec. 31, 2019 | $ 94 | $ (172) | $ 1,686,832 | $ (24,405,503) | (22,718,749) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | 92,866 | 92,866 | |||||||||
Net loss | (4,652,084) | (4,652,084) | |||||||||
Balance at the end (in shares) at Dec. 31, 2020 | 936,213 | 31,000 | |||||||||
Balance at the end at Dec. 31, 2020 | $ 94 | $ (172) | 1,779,698 | (29,057,587) | (27,277,967) | ||||||
Balances at the end (in shares) at Mar. 31, 2021 | 572,465 | 100,365 | 618,182 | ||||||||
Balances at the end at Mar. 31, 2021 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | 22,036 | 22,036 | |||||||||
Net loss | (3,963,491) | (3,963,491) | |||||||||
Balance at the end (in shares) at Mar. 31, 2021 | 936,213 | 31,000 | |||||||||
Balance at the end at Mar. 31, 2021 | $ 94 | $ (172) | 1,801,734 | (33,021,078) | (31,219,422) | ||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | 572,465 | 100,365 | 618,182 | 572,465 | 100,365 | 618,182 | |||||
Balance at the beginning at Dec. 31, 2020 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | $ 7,999,997 | $ 561,041 | $ 2,612,038 | 11,173,076 | ||||
Balances at the end (in shares) at Dec. 31, 2021 | 0 | 0 | 0 | ||||||||
Balance at the beginning (in shares) at Dec. 31, 2020 | 936,213 | 31,000 | |||||||||
Balance at the beginning at Dec. 31, 2020 | $ 94 | $ (172) | 1,779,698 | (29,057,587) | (27,277,967) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | $ 4 | 622,060 | 622,064 | ||||||||
Share based compensation expense (shares) | 44,129 | ||||||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering | $ 129 | 11,172,947 | 11,173,076 | ||||||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering (in shares) | 1,291,012 | ||||||||||
Offering costs in connection with public offering | (2,339,816) | (2,339,816) | |||||||||
Issuance of common stock in exchange for services | 12,500 | 12,500 | |||||||||
Issuance of common stock in exchange for services (in shares) | 2,000 | ||||||||||
Issuance of common stock through exercise of stock options | $ 5 | 58,643 | 58,648 | ||||||||
Issuance of common stock through exercise of stock options (in shares) | 55,694 | ||||||||||
Net loss | (8,961,815) | (8,961,815) | |||||||||
Balance at the end (in shares) at Dec. 31, 2021 | 8,733,479 | 31,000 | |||||||||
Balance at the end at Dec. 31, 2021 | $ 873 | $ (172) | 67,810,289 | (38,019,402) | 29,791,588 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Share-based compensation expense | 3,125 | 184,191 | 184,191 | ||||||||
Issuance of common stock through exercise of stock options | $ 8 | 75,269 | $ 75,277 | ||||||||
Issuance of common stock through exercise of stock options (in shares) | 77,679 | 77,679 | |||||||||
Net loss | (2,383,742) | $ (2,383,742) | |||||||||
Balance at the end (in shares) at Mar. 31, 2022 | 8,814,283 | 31,000 | |||||||||
Balance at the end at Mar. 31, 2022 | $ 881 | $ (172) | $ 68,069,749 | $ (40,403,144) | $ 27,667,314 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (2,383,742) | $ (3,963,491) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 184,191 | 22,036 |
Amortization of internally developed software | 266,219 | 235,229 |
Depreciation of property and equipment | 4,712 | 11,130 |
Bad debt expense | 165,097 | 20,652 |
Amortization of debt issuance costs on note payable | 3,048 | |
Loss on extinguishment on bridge notes | 2,750,171 | |
Gain on extinguishment on note payable | (788,156) | |
Amortization of discount on bridge notes | 289,867 | |
Change in fair value of derivative liabilities | 202,000 | |
Amortization of discount and debt issuance costs on convertible notes | 1,088 | |
Change in operating assets and liabilities: | ||
Accounts receivable - unbilled | 480,505 | (426,973) |
Accounts receivable | 480,657 | 925,544 |
Due from factor | (495,735) | |
Prepaid expenses and other current assets | 31,285 | (10,155) |
Operating lease right-of-use asset | 36,291 | |
Accounts payable | (551,184) | 299,130 |
Accrued expenses | 30,171 | 308,410 |
Accrued interest | 562,193 | |
Operating lease liability | (35,741) | |
Deferred revenue | (87,425) | (69,189) |
Net cash used in operating activities | (1,375,916) | (126,249) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capitalization of internally developed software | (339,162) | (214,534) |
Net cash used in investing activities | (339,162) | (214,534) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from exercise of stock options | 75,277 | |
Net cash provided by financing activities | 75,277 | |
Net decreases in cash | (1,639,801) | (340,783) |
Cash at beginning of period | 27,738,979 | 695,909 |
Cash at end of period | 26,099,178 | 355,126 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 35,000 | |
Supplemental disclosure of non-cash investing and financing activities: | ||
Non-cash amounts of lease liabilities arising from obtaining right of use assets | $ 333,123 | |
Derivative liability for embedded conversion features on convertible notes issued | $ 3,614,000 |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | ||
NATURE OF BUSINESS AND BASIS OF PRESENTATION | NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION Business iSpecimen Inc. (“iSpecimen” or the “Company”) was incorporated in 2009 under the laws of the state of Delaware. The Company has developed and launched a proprietary online marketplace platform that connects medical researchers who need access to subjects, samples, and data, with hospitals, laboratories, and other organizations who have access to them. iSpecimen is a technology-driven company founded to address a critical challenge: how to connect life science researchers who need human biofluids, tissues, and living cells (“biospecimens”) for their research, with biospecimens available (but not easily accessible) in healthcare provider organizations worldwide. The Company’s proprietary platform, the iSpecimen Marketplace platform, is designed to solve this problem and transform the biospecimen procurement process to accelerate medical discovery. The Company is headquartered in Lexington, Massachusetts and its principal market is North America. The Company operates as one operating Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) as determined by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) for interim financial information, and, pursuant to the rules and regulations of Article 10 of Regulation S-X of the Securities Act of 1933, as amended (the “Securities Act”), published by the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results of operations for the periods presented. They may not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these unaudited condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2021. Liquidity and Going Concern The Company has recognized recurring losses and as of March 31, 2022, the Company had working capital of $28,104,041, an accumulated deficit of $40,403,144, cash of $26,099,178 and accounts payable and accrued expenses of $1,321,468. Management believes that the Company's existing cash, which include the net proceeds from the Company’s initial public offering in June 2021 (the “IPO”), the Term Loan (defined below), and the PIPE (defined below) will allow the Company to continue its operations for at least the next 12 months from the date these unaudited condensed financial statements are issued and therefore the conditions raising substantial doubt raised in prior periods have been alleviated. As a result of recurring losses, the continued viability of the Company beyond May 2023 may be dependent on its ability to continue to raise additional capital to finance its operations. Impact of the COVID-19 Pandemic on the Company’s Operations In December 2019, the novel coronavirus SARS-Cov2, or COVID-19 outbreak, was reported to have surfaced in China. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency due to the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The Company is subject to the risks arising from the COVID-19 outbreak’s social and economic impacts on the healthcare services industry. The Company’s management believes that the social and economic impacts could have a significant impact on future financial condition, liquidity, and results of operations, which include but are not limited to the following: (i) restrictions on in-person activities arising from shelter-in-place, or similar isolation orders; (ii) inability to source specimens from the Company’s suppliers arising from shelter-in-place, or similar isolation orders; (iii) reduced capacity if personnel are infected or quarantined; (iv) decline in researcher demand for specimens; and (v) deteriorating economic conditions, such as increased unemployment rates and recessionary conditions. The COVID-19 outbreak has continued to impact the Company’s operations during the three months ended March 31, 2022 and 2021. In response to the COVID-19 outbreak, the Company initially implemented measures to help stabilize revenue as well as measures to reduce costs. To stabilize revenue, the Company added COVID-19 samples to its product line to support growing research in this area and also implemented mobile phlebotomy to more easily access research subjects. Cost saving measures included the elimination of non-essential travels and in-person training activities, the deferral of certain planned expenditures, and the furlough of a small number of employees in August 2020. Given the evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company expects this matter to continue to have an impact on its results of operations, financial condition, and liquidity. However, the extent of the financial impact and the duration cannot be reasonably estimated at this time. Impact of Russia’s Invasion of Ukraine on the Company’s Operations The Company’s business was negatively impacted during the first quarter of 2022 by Russia’s invasion of Ukraine. At the start of the conflict, the Company had approximately $1 million of purchase orders that were slated to be fulfilled by the Company’s supply network in Ukraine and Russia. This supply network shut down quickly at the start of the conflict. Ukrainian suppliers were disabled due to conflict conditions and evacuations and Russian suppliers were disabled by sanctions. While the Company mobilized to shift these purchase orders to other suppliers in the network, the process of getting specimen collections from other supply sites took time, which caused a delay in the fulfillment of such purchase orders. The Company believes that it has successfully resourced the purchased orders from different suppliers. The short and long-term implications of Russia’s invasion of Ukraine are difficult to predict at this time. The imposition of sanctions and counter sanctions may have an adverse effect on the economic markets generally and could impact the Company’s business and the businesses of the Company’s supply partners, especially those in Ukraine and Russia. Because of the highly uncertain and dynamic nature of these events, it is not currently possible to estimate the impact of Russian’s invasion of Ukraine on the Company’s business and the companies from which the Company obtains supplies and distributes specimens. | 1. iSpecimen Inc. (“iSpecimen” or the “Company”) was incorporated in 2009 under the laws of the state of Delaware. The Company has developed and launched a proprietary online marketplace platform that connects medical researchers who need access to subjects, samples, and data, with hospitals, laboratories, and other organizations who have access to them. iSpecimen is a technology-driven company founded to address a critical challenge: how to connect life science researchers who need human biofluids, tissues, and living cells (“biospecimens”) for their research, with biospecimens available (but not easily accessible) in healthcare provider organizations worldwide. The iSpecimen Marketplace platform was designed to solve this problem and transform the biospecimen procurement process to accelerate medical discovery. The Company is headquartered in Lexington, Massachusetts and its principal market is North America. The Company operates as one operating and reporting Basis of Presentation The Company’s financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). On March 30, 2021, the Company effected a 1-for-5.545 Initial Public Offering On June 21, 2021, the Company consummated its initial public offering ("IPO") in which the Company issued and sold 2,250,000 shares of its common stock at a public offering price of $8.00 per share, for aggregate gross proceeds of $18 million. The net proceeds from the IPO were $15.7 million after deducting underwriting discounts of $1.7 million and other offering costs of $0.6 million. The shares of common stock commenced trading on the Nasdaq Stock Market LLC on June 17, 2021 under the ticker symbol “ISPC.” Upon closing of the IPO, all of the then-outstanding shares of redeemable convertible preferred stock automatically converted into common stock at a ratio of 1:1, resulting in the issuance of 1,291,012 shares of common stock. Subsequent to the closing of the IPO, there were no shares of convertible preferred stock outstanding. Upon closing of the IPO, the Company converted all $5.5 million of its outstanding principal and all unpaid and accrued interest of approximately $1.3 million of the Convertible Notes (as defined below) into 1,206,614 shares of common stock at a conversion price of $5.60 per share. The Company incurred an approximately $0.3 million loss on conversion of the Convertible Notes during the year ended December 31, 2021. As of December 31, 2021, there were no Convertible Notes or Bridge Notes (as defined below) outstanding. Additionally, upon closing of the IPO, the Company converted $4 million of its outstanding principal and accrued and unpaid interest of approximately $0.7 million of the Bridge Notes, as amended, into 842,429 shares of common stock at a conversion price of $5.60 per share. During the year ended December 31, 2021, the Company paid off the remaining principal balance of $3.0 million on the Bridge Notes and accrued interest of $64,110. On July 1, 2021, the Company sold an additional 337,500 shares of its common stock, pursuant to the underwriters' full exercise of the overallotment option, at a public offering price of $8.00 per share, for aggregate gross proceeds of $2.7 million. In aggregate, the Company received approximately $18.2 million in net cash proceeds from the IPO after deducting for all underwriting discounts of $1.9 million and other offering costs of $0.6 million. Private Placement On December 1, 2021, the Company closed on a private placement (“PIPE”) for the sale of 1,749,999 shares of common stock of iSpecimen together with warrants to purchase 1,312,500 shares of common stock ("Warrants"), which resulted in gross proceeds to iSpecimen of approximately $21 million , before deducting offering costs of approximately $1,435,000 . Each share of common stock and accompanying three-quarters of one Warrant were sold at a combined offering price of $12.00 . The detachable Warrants have a five and one-half year term and an exercise price of $13.00 per share. Liquidity and Going Concern The Company has recognized recurring losses. At December 31, 2021, the Company had a net working capital of $30,442,955, an accumulated deficit of $38,019,402, cash of $27,738,979 and accounts payable and accrued expenses of $1,842,481. Management believes that the Company's existing cash, which include the net proceeds from the IPO, the Term Loan, and the PIPE will allow the Company to continue its operations for at least the next 12 months from the date these financial statements are issued and therefore the conditions raising substantial doubt raised in prior periods has been alleviated. As a result of recurring losses, the continued viability of the Company beyond March 2023 may be dependent on its ability to continue to raise additional capital to finance its operations. Impact of the COVID-19 Pandemic on our Operations In December 2019, the novel coronavirus SARS-Cov2, or COVID-19 outbreak, was reported to have surfaced in China. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency due to the risks to the international community as the virus spread globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. iSpecimen is subject to the risks arising from the COVID-19 outbreak’s social and economic impacts on the healthcare services industry. Our management believes that the social and economic impacts, which include but are not limited to the following, could have a significant impact on future financial condition, liquidity, and results of operations: (i) restrictions on in-person activities arising from shelter-in-place, or similar isolation orders; (ii) inability to source specimens from our suppliers arising from shelter-in-place, or similar isolation orders; (iii) reduced capacity if personnel are infected or quarantined; (iv) decline in researcher demand for specimens; and (v) deteriorating economic conditions, such as increased unemployment rates and recessionary conditions. The COVID-19 outbreak has impacted the Company’s operations during the year ended December 31, 2021 and 2020. In response to the COVID-19 outbreak, the Company initially implemented measures to help stabilize revenue as well as measures to reduce costs. To stabilize revenue, the Company added COVID-19 samples to its product line to support growing research in this area and also implemented mobile phlebotomy to more easily access research subjects. Cost saving measures included the elimination of non-essential travel and in-person training activities, the deferral of certain planned expenditures, and the furlough of a small number of employees in August 2020. Given the evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company expects this matter to continue to have an impact on its results of operations, financial condition, and liquidity. However, the extent of the financial impact and the duration cannot be reasonably estimated at this time. |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies and recent accounting standards are summarized in Note 2 of the Company’s annual report on Form 10-K for the year ended December 31, 2021. There were no significant changes to these accounting policies during the three months ended March 31, 2022. Use of Estimates The preparation of the Company’s unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of March 31, 2022 and December 31, 2021 because of their short-term nature. Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five-step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the Company satisfies the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for the Company’s medical research customers using the Company’s proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to the Company’s customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for the Company’s customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of the Company’s proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within the Company’s network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, which can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of the Company’s revenue recognition policy. The Company has concluded that it acts as principal in the arrangement as it manages the procurement process from beginning to end and determines which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as the Company has created an asset with no alternative use to the Company which has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract, and related order upon receipt, to determine if the specimen ordered has an alternative use by us. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. In the rare circumstances where specimens do have an alternative future use, the Company's performance obligation is satisfied at the time of shipment. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which the Company has an enforceable right to payment, has been accessioned, the Company records the offset to revenue in accounts receivable — unbilled. Once the specimen has been shipped and invoiced, a reclassification is made from accounts receivable — unbilled to accounts receivable. Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. The Company has a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, the Company has given the customer a credit for the returns. The Company has not recorded a returns allowance. The following table summarizes the Company’s revenue for the three months ended March 31: 2022 2021 Specimens – contracts with customers $ 2,372,386 $ 2,947,295 Shipping and other 146,274 16,512 Revenue $ 2,518,660 $ 2,963,807 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of March 31, 2022 and December 31, 2021, the Company had an allowance for doubtful accounts of $184,837 and $269,170, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. Internally Developed Software, Net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology costs and are expensed to operations as incurred. Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the three months ended March 31, 2022 and 2021. Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of Company-specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 per share at March 31, 2021. Restricted Stock Units The Company recognizes share-based compensation expense from restricted stock units (the “RSUs”) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 7. Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides common stock equivalents excluded from diluted net loss per share as of March 31: 2022 2021 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of RSUs 291,167 — Shares issuable upon exercise of stock options 176,142 265,102 Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants (defined below) to purchase common stock 90,000 — Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies ASC 740 to reduce complexity while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for the Company for interim and annual reporting periods beginning after December 15, 2021. The Company adopted this new standard as of January 1, 2022, but it did not have a material impact on the Company’s financial statements. In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02 (“ASU 2016-02”), which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In June 2020, the FASB issued ASU No. 2020-05 (“ASU 2020-05”) which pushed back the effective date of the adoption of ASC 842 one year for private and not-for-profit entities that did not issue or serve as conduit bond obligors and had not yet adopted the standard. The new effective date was for fiscal year periods beginning after December 15, 2021. The Company adopted ASU 2016-02 effective January 1, 2022 using the Comparatives Under 840 transition method whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted within the standard, among other practical expedients which allowed the Company to carry forward prior conclusions about lease identification and classification which allows not separating lease and non-lease components and allows not recording leases with an initial term of twelve months or less on the balance sheet across all existing asset classes. Adoption of the new standard resulted in the balance sheet recognition of additional assets of $333,000 and lease liabilities of approximately $333,000. For additional information regarding the Company’s lease arrangements, see Note 6 in the notes to unaudited condensed financial statements. | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. Reclassification Certain comparative figures have been reclassified to conform to the current year presentation. During 2021, the Company updated its accounting policy to allocate stock-based compensation costs to all departments. The costs were previously included only in general and administrative expenses. As a result of the reclassification, certain line items have been amended for the year ended December 31, 2020, in the statement of operations and the related notes to the financial statements. The reclassifications had no impact on the total operating expenses, net income or earnings per share for the year ended December 31, 2020. Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no significant off-balance sheet risks, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Cash accounts are maintained at financial institutions that potentially subject the Company to concentrations of credit risk. At December 31, 2021 and 2020, substantially all of the Company’s cash was deposited in accounts at one financial institution. The Company maintains its cash deposits, which at times may exceed the federally insured limits, with a reputable financial institution and, accordingly, the Company believes such funds are subject to minimal credit risk. Concentration of credit risk with respect to accounts receivable is typically related to customers who account for a significant portion of revenue. During 2021, no customers represented greater than 10% of the Company’s revenues, one customer represented approximately 11% of accounts receivable and two customers represented approximately 23% and 17% of accounts receivable-unbilled at December 31, 2021. During 2020, two customers represented approximately 11% and 10% of the Company’s revenues, one customer represented approximately 10% of accounts receivable, and three customers represented approximately 23%, 13% and 11% of accounts receivable-unbilled at December 31, 2020. During the years ended December 31, 2021 and 2020, revenue attributable to customers located in foreign countries is approximately 7% and 6% of revenue, respectively. During the years ended December 31, 2021 and 2020, accounts receivable attributable to customers located in foreign countries is approximately 6% and 11% of accounts receivable, respectively. During the years ended December 31, 2021 and 2020, accounts receivable-unbilled attributable to customers located in foreign countries is approximately 11% and 0% of accounts receivable-unbilled, respectively. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment . For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of December 31, 2021 and 2020 because of their short-term nature. The liability in connection with conversion features included within certain of the Company’s convertible notes payable was classified as a derivative liability for embedded conversion features on the balance sheets and is considered to be a Level 3 liability. Derivative Liability for Embedded Conversion Features The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates its convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for separately. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other bifurcated embedded derivative instruments in the convertible instrument, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The result of this accounting treatment is that the fair value of the embedded derivative is recorded as a liability and marked-to-market each balance sheet date, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. Recent Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Accounting Standards Issued, Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) we satisfy the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for our medical research customers using our proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to our customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for our customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of our proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within our network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of our revenue recognition policy. The Company has concluded that we act as principal in the arrangement as we manage the procurement process from beginning to end and determine which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as we have created an asset with no alternative use to the Company and has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract and related order upon receipt to determine if the specimen ordered has an alternative use by us. In the rare circumstances where specimens do have an alternative future use, our performance obligation is satisfied at the time of shipment. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which we have an enforceable right to payment, has been accessioned, we record the offset to revenue in accounts receivable — Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. We have a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, we have given the customer a credit for the returns. We have not recorded a returns allowance. The following table summarizes the Company’s revenue for the years ended December 31: 2021 2020 Specimens – contracts with customers $ 10,944,255 $ 8,086,324 Shipping and other 191,048 97,782 Revenue $ 11,135,303 $ 8,184,106 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of December 31, 2021, and 2020, the Company had an allowance for doubtful accounts of $269,170 and $108,096, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. When an item is sold or retired, the costs and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the statement of operations. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the respective assets. A summary of estimated useful lives is as follows: Asset category Estimated Useful Life Website 3 years Computer equipment and purchased software 5 years Equipment 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life of asset or lease term Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. Internally Developed Software, net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology and are expensed to operations as incurred. Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the years ended December 31, 2021 and 2020. Debt Issuance Costs Debt issuance costs are recorded net against the related debt and amortized to interest expense over the life of the related debt. During the years ended December 31, 2021 and 2020, amortized debt issuance costs of $875,293 and $9,185 respectively, were recorded as a component of interest expense. Cost of Revenue Cost of revenue primarily consists of the purchase price to acquire specimens from hospitals and laboratories; inbound and outbound shipping costs; supply costs related to samples; payment processing and related transaction costs; and costs paid to the supply sites to support sample collections. Shipping costs upon receipt of products from suppliers are recognized in cost of revenue. For the year ended December 31, 2021, the Company acquired approximately 11%, 11%, 10% and 10% of specimens from four vendors. For the year ended December 31, 2020, the Company acquired approximately 21% of specimens from one vendor. Technology Technology costs include payroll and related expenses for employees involved in the development and implementation of iSpecimen’s technology; software license and system maintenance fees; outsourced data center costs; data management costs; depreciation and amortization; and other expenses necessary to support technology initiatives. Collectively, these costs reflect the investments the Company makes in order to offer a wide variety of products and services to customers. Technology and data costs are generally expensed as incurred. A portion of technology costs are related to research and development. Costs incurred for research and development are expensed as incurred, except for software development costs that are eligible for capitalization. Research and development costs primarily include salaries and related expenses, in addition to the cost of external service providers. For the years ended December 31, 2021, and 2020, research and development costs totaled $295,305 and $319,235, respectively. Sales and Marketing Sales and marketing costs primarily consist of payroll and related expenses for personnel engaged in marketing and selling activities, including salaries and sales commissions; travel expenses; public relations and social media costs; ispecimen.com website development and maintenance costs; search engine optimization fees; advertising costs; direct marketing costs; trade shows and events fees; marketing and customer relationship management software; and other marketing-related costs. Advertising expenses consist primarily of marketing, public relations, and promotional materials. Advertising costs are expensed as incurred and totaled $229,223 and $111,304 for the years ended December 31, 2021 and 2020, respectively. Supply Development The Company has agreements with supply partners that allow the Company to procure specimens from them and distribute these samples to customers. Supply development costs primarily include payroll and related expenses for personnel engaged in the development and management of this supply network; related travel expenses; regulatory compliance costs to support the network; and other supply development and management costs. Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing operations and customer service teams, including costs attributable to assess the feasibility of specimen requests; creating and managing orders; picking non-capitalizable, packaging, and preparing customer orders for shipment; responding to inquiries from customers; and laboratory equipment and supplies. General and Administrative General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses for human resources, legal, finance, and executive teams; associated software licenses; facilities and equipment expenses, such as depreciation and amortization expense and rent, outside legal expenses, insurance costs, and other general and administrative costs. Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 at December 31, 2020. The Company conducted multiple valuations throughout the year ended December 31, 2020 and the estimate of the fair value of the Company’s common stock ranged from $0.39 and $3.83 as a result of the changes in the factors described above. Restricted Stock Units (RSUs) The Company recognizes share-based compensation expense from restricted stock units (RSUs) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. Income Taxes The Company provides for income taxes using the asset and liability method. The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company does not have any material uncertain tax positions for which reserves would be required. The Company will recognize interest and penalties related to uncertain tax positions, if any, in income tax expense. Deferred Offering Costs Deferred offering costs are included in prepaid and other current assets and consists of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the planned initial public offering. The Company had approximately $265,000 of deferred offering costs related to the IPO which were recorded in other current assets on the balance sheet as of December 31, 2020. On June 21, 2021, the Company consummated its IPO; accordingly, the Company recognized deferred initial public offering costs of approximately $0.6 million as a reduction from gross proceeds associated with the IPO through additional paid-in capital in the accompanying condensed consolidated balance sheet. The Company recorded approximately $2.3 million of offering costs in additional paid-in capital in connection with the IPO. Accordingly, there were no deferred offering costs as of December 31, 2021. Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 9. Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides total shares outstanding, as of December 31: 2021 2020 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of restricted stock units 282,417 — Shares issuable upon exercise of stock options 255,147 251,847 Shares issuable upon exercise of PIPE Warrant to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants to purchase common stock 90,000 — |
PROPERTY AND EQUIPMENT, NET_2
PROPERTY AND EQUIPMENT, NET | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | ||
PROPERTY AND EQUIPMENT, NET | 3. PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following at the dates indicated: March 31, December 31, 2022 2021 (unaudited) Website $ 107,927 $ 107,927 Computer equipment and purchased software 84,588 84,588 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 340,083 Accumulated depreciation (312,014) (307,302) Total property and equipment, net $ 28,069 $ 32,781 Depreciation expense for property and equipment was $4,712 and $11,130 for the three months ended March 31, 2022 and 2021, respectively. | 4. Property and equipment, net consisted of the following at December 31: 2021 2020 Website $ 107,927 $ 105,376 Computer equipment and purchased software 84,588 84,589 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 337,533 Accumulated depreciation (307,302) (261,944) Total property and equipment, net $ 32,781 $ 75,589 Depreciation expense for property and equipment was $45,358 and $44,758 for the years ended December 31, 2021 and 2020, respectively. |
INTERNALLY DEVELOPED SOFTWARE_3
INTERNALLY DEVELOPED SOFTWARE, NET | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
INTERNALLY DEVELOPED SOFTWARE, NET | ||
INTERNALLY DEVELOPED SOFTWARE, NET | 4. INTERNALLY DEVELOPED SOFTWARE, NET During the three months ended March 31, 2022 and 2021, the Company capitalized $339,162 and $214,534, respectively, of internally developed software costs in connection with the development and continued enhancement of the technology platform and web interfaces. Capitalized costs primarily consist of software costs, payroll and payroll-related costs for the Company’s employees. The Company recognized $266,219 and $235,229 of amortization expense associated with capitalized internally developed software costs during the three months ended March 31, 2022 and 2021, respectively. | 5. During 2021 and 2020, the Company capitalized $1,035,367 and $1,102,186, respectively, of internally developed software costs in connection with the development and continued enhancement of the technology platform and web interfaces. Capitalized costs primarily consist of payroll and payroll-related costs for the Company’s employees. The Company recognized $958,639 and $774,929 of amortization expense associated with capitalized internally developed software costs during the years ended December 31, 2021, and 2020, respectively. Accumulated amortization associated with capitalized internally developed software costs as of December 31, 2021, and 2020 was $3,833,904 and $2,875,264, respectively. |
DEBT_2
DEBT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
DEBT | ||
DEBT | 5. DEBT Term Loan On August 13, 2021 (the "Closing Date"), the Company entered into a Loan and Security Agreement 30 The Company shall have the option to prepay all, but not less than all, of the outstanding loan balance, provided the Company a) delivers written notice to the financial institution of their election to prepay such Term Loan at least ten (10) days prior to such prepayment and b) pay, on the date of such prepayment, (1) all outstanding principal with respect to the Term Loan, plus accrued but unpaid interest, plus (2) all fees (including any late fee), and other sums, including bank expenses, if any, that shall have become due and payable. The Lender which holds the Term Loan is granted a security interest in substantially all assets of the Company (“Collateral”). The Term Loan contains certain covenants that the Company considers usual and customary for an agreement of this type for comparable commercial borrowers. As of March 31, 2022, the Company was not in compliance with one of the Term Loan covenants. See Note 10. The outstanding principal balance on the Term Loan was $3,500,000 as of March 31, 2022, and interest expense for the three months ended March 31, 2022 was $35,000. Debt issuance costs totaled $81,989, comprised of a warrant to purchase 12,500 shares of common stock issued to the Lender with a fair value of $49,072 (the "Lender Warrant"), fees of $23,066 paid to the Lender and legal costs of $9,851. Amortization of the debt issuance costs related to the Term Loan, included in interest expense on the statement of operations, totaled $3,048 for the period ending March 31, 2022. Unamortized debt issuance costs on the Term Loan totaled $74,336 and $77,384 as of March 31, 2022, and December 31, 2021, respectively. As of March 31, 2022, future minimum payments due related to the Term Loan were as follows: 2022 (excluding 3 months ended March 31, 2022) $ — 2023 1,166,667 2024 1,400,000 2025 933,333 Total 3,500,000 Less debt issuance cost (74,336) Term Loan, net $ 3,425,664 | 6. Note Payable In May 2020, the Company applied for and received $783,008 in unsecured loan funding from the Paycheck Protection Program (the “PPP Loan”), established pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and administered by the U.S. Small Business Administration (“SBA”). Under the terms of the promissory note (the “PPP Note”) and the PPP Loan, interest accrues on the outstanding principal at the rate of 1% per annum. Interest expense under the PPP Loan amounted to $279 and $5,127 for the years ended December 31, 2021 and 2020, respectively. The Company received full forgiveness of all outstanding principal of, and accrued and unpaid interest on the PPP Loan as of January 13, 2021. The forgiveness of the PPP Loan qualified for debt extinguishment and as a result, the outstanding principal and accrued and unpaid interest on the PPP Loan was recorded as a net gain on extinguishment of the PPP Loan totaling $788,156 for the year ended December 31, 2021 and the debt was eliminated from the Company's balance sheet. Related Party Convertible Notes Payable During 2017 and 2018, the Company issued Related Party Convertible Promissory Notes (the “Convertible Notes”) to related parties totaling $5,500,000. The Convertible Notes bear interest at a rate of six percent (6%) per annum, without compounding. The Convertible Notes are convertible into shares of the Company’s preferred stock, upon the following: (i) a new permanent equity financing yielding gross proceeds of in excess of $10,000,000, including conversion of the outstanding principal of the Convertible Notes (a “Qualified Equity Financing”), (ii) achievement of positive free flow from operations on a quarterly basis for the two consecutive quarters ending 90 days prior to the maturity date, (iii) an acquisition, or (iv) upon election of the holders of the majority of the aggregate principal outstanding (the “Majority Lenders”) The maturity date on the Convertible Notes is the earliest occurrence of (i) the closing of a Qualified Equity Financing, (ii) the date upon which prepayment by the Company occurs with the consent of the Majority Lenders, (iii) the date upon which the Convertible Notes are otherwise converted into equity securities, or (iv) March 31, 2020. In March 2020, the Majority Lenders elected to extend the maturity date through September 30, 2020. On October 1, 2020, the maturity date was further extended to March 31, 2021. On March 8, 2021, the maturity date was further extended to June 30, 2021. The Company has determined that the terms related to the Qualified Equity Financing conversion and acquisition conversion features (collectively, the “Embedded Conversion Features”) were determined to not be clearly and closely related to the Convertible Note host instrument and meet the definition of a derivative. Therefore, the Embedded Conversion Features were bifurcated from the Convertible Notes and separately measured at fair value. The derivative liability has been subsequently marked-to-market each reporting period with changes in fair value recognized in the statement of operations (see Note 7). Interest expense on the Convertible Notes totaled $156,411 and $330,904 for the years ended December 31, 2021 and 2020, respectively. Unamortized debt issuance costs on the Convertible Notes totaled $0 and $9,189 at December 31, 2021 and December 31, 2020, respectively. Debt discounts on the Convertible Notes totaled $0 and $0 for the years ended December 31, 2021 and 2020, respectively. During the years ended December 31, 2021 and 2020, amortization of debt discounts amounted to $1,088 and $141,628, respectively. Conversion of Convertible Notes Payable In connection with the consummation of the IPO, the Company converted all $5,491,663 of its outstanding principal and all unpaid and accrued interest of $1,257,066 of the Convertible Notes into 1,206,614 shares of common stock on June 21, 2021 at a conversion price of $5.60 per share. As of December 31, 2021, there were no Convertible Notes outstanding. The Company incurred an approximate $260,000 loss on conversion of the Convertible Notes during the year ended December 31, 2021. Bridge Financing From 2018 through 2021, the Company issued Secured Promissory Notes (the “Bridge Notes”) to new investors and existing stockholders in an amount of $7,000,000 to finance the Company’s interim working capital needs. Of this amount, $1,905,000 was issued to related parties (“Related Party Bridge Notes”). The Bridge Notes, including the Related Party Bridge Notes, have identical terms. The Bridge Notes bear interest at a rate of twenty-four percent (24%) per annum, without compounding. The Bridge Notes and all accrued interest are due and payable on the earliest occurrence of (i) a Qualified Equity Financing, (ii) the sale of the Company, (iii) prepayment by the Company, or (iv) December 31, 2019, which was subsequently extended to June 30, 2020. In June 2020, the Bridge Notes were amended to further extend the maturity date through September 30, 2020. On October 1, 2020, the Company amended the Bridge Notes to extend the maturity date to March 31, 2021 and to increase the interest rate from 24% to 30% after October 1, 2020. On March 15, 2021, the Company entered into an Amendment to the Bridge Notes and the maturity date was further extended to April 30, 2021. The Bridge Notes will be repayable upon demand of the Majority Lenders of the Bridge Notes at any time on or after the maturity date. The Bridge Notes are senior in right of payment and priority to any Convertible Debt and subordinated to any Senior Debt. The investors that hold the Bridge Notes are granted a security interest in substantially all assets of the Company (“Collateral”). On March 15, 2021, the Company entered into a Fifth Amendment (the "Amendment") to the Note Subscription Agreements and Secured Promissory Notes. The Bridge Notes are hereafter referred to as the "Amended Bridge Notes". The terms of the Amendment are as follows: Maturity Date The Amended Bridge Notes shall bear interest, on a non-compounding basis, at a rate of thirty percent (30%) per annum from and after October 1, 2020, due on maturity on the earlier of (i) the closing of an initial public offering yielding gross proceeds in excess of $18,000,000, exclusive of any existing Convertible Notes (a “Qualified IPO”), (ii) the sale of the Company, (iii) prepayment by the Company, or (iv) April 30, 2021. The Majority Lenders may, with the approval of the Company, elect to extend the maturity date one or more times, at their discretion. On April 28, 2021, the maturity date was further extended to May 31, 2021. On May 12, 2021, the maturity date was further extended to June 30, 2021. Elective Conversion Upon a Qualified IPO The holders of the Amended Bridge Notes may voluntarily elect, at any time prior the maturity date and up to March 19, 2021, to convert 50% or more of the outstanding unpaid principal plus any amount of outstanding unpaid interest at the time of the Qualified IPO, into the same class or series of securities of the Company to be offered and issued in the Qualified IPO (the “IPO Stock”). The conversion rate shall be equal to the issue price of the IPO Stock less a thirty percent (30%) discount (“the Elective Conversion Stock”). The elective conversion amount shall be deducted from the amount of principal and interest outstanding in order to arrive at an adjusted principal and interest repayment amount. The sum of the amounts being converted on the Amended Bridge Notes shall first convert the outstanding principal and then the outstanding interest second. Repayment of Adjusted Outstanding Interest and Principal Upon a Qualified IPO If a Qualified IPO is consummated prior to the maturity date, and the holders have not voluntarily converted, the Company shall make a cash payment to the holders of the Amended Bridge Notes equal to the greater of either the total adjusted outstanding interest or one and one-half times (1.50X) the Third-Party Loan Proceeds (“Note Repayment Proceeds”). Third-Party Loan Proceeds are defined as the net cash proceeds received by the Company from an institutional lender, commercial bank, or other similar lender consummated on or about the time of the Qualified IPO (or contingent upon the closing of the Qualified IPO). Repayments shall first be applied to the adjusted outstanding interest due in cash to the holders of the Amended Bridge Notes. The residual value shall be next applied to the adjusted outstanding principal (the “Principal Repayment Proceeds”). The remaining cash repayment shall be calculated by multiplying the Principal Repayment Proceeds by a fraction, the numerator of which is equal to the adjusted principal repayment amount of such note holder, and the denominator of which is equal to the total adjusted outstanding principal to all note holders. In no event shall any cash payment be made to any note holder exceed the sum of the adjusted interest repayment amount plus the adjusted principal repayment amount for such note holder. Automatic Conversion or Debt Extension Any remaining unpaid principal, calculated by subtracting the Principal Repayment Proceeds from the total adjusted outstanding principal (the “Automatic Principal Conversion Amount”), shall then automatically convert into IPO Stock at a rate equal to the issue price of the IPO Stock less a ten percent (10%) discount (that is, at a rate of ninety percent (90%) of the issue price of the IPO Stock; such discounted IPO Stock; the “Automatic Conversion Stock”). If the Company is unable to repay at least twenty-five percent (25%) of the total adjusted outstanding principal of the Amended Bridge Notes (“the “Principal Repayment Floor”), then no Automatic Conversion Stock shall be issued and the total adjusted outstanding principal on the Amended Bridge Notes shall remain on the books of the Company under their existing Bridge Notes which shall automatically be amended to (i) have their interest rates adjusted to a rate of fifteen percent (15%) per annum and (ii) have their maturity date set to a date that is eighteen (18) months from the date of the Qualified IPO. Amended Bridge Notes Embedded Conversion Features The Company has determined that the terms related to the elective and automatic conversion features (collectively, the “Amended Bridge Notes Embedded Conversion Features”) were determined to not be clearly and closely related to the Amended Bridge Notes host instrument and meet the definition of a derivative. Therefore, the Amended Bridge Notes Embedded Conversion Features were bifurcated from the Amended Bridge Notes and separately measured at fair value. The derivative liability has been subsequently marked-to-market each reporting period with changes in fair value recognized in the statement of operations. The Amended Bridge Notes Embedded Conversion Features were initially recorded as a component of the loss on debt extinguishment with an offset to the derivative liability at fair value. No related discount will be recorded on the Amended Bridge Notes, and the derivative liability will not be amortized using the effective interest rate over the term of the Amended Bridge Notes. Debt Extinguishment The Company evaluated the terms of the March 15, 2021 Amendment. This evaluation included analyzing whether there are significant and consequential changes to the economic substance of the Bridge Notes. If the change is deemed insignificant then the change is considered a debt modification, whereas if the change is substantial the change is reflected as a debt extinguishment. A modification or an exchange that adds or eliminates a substantive conversion option as of the conversion date would always be considered substantial and require extinguishment accounting. The addition of the elective and mandatory conversion options, as described above, would be considered substantive based on the likelihood of the option being exercised in the near future in connection with a Qualified IPO event. Accordingly, the Company accounted for the amendment of the Notes as an extinguishment of the original Bridge Notes. As a result, the Company recorded a loss on extinguishment of $2,740,425. The extinguishment loss also included a write-off of unamortized debt issuance costs of approximately $5,700. Additionally, the Company recorded a discount on the Amended Bridge Notes of approximately $869,600, which was amortized through interest expense over the life of the Amended Bridge Notes (i.e., March 15, 2021 through April 30, 2021). Interest expense on the Bridge Notes, including $320,469 and $446,660 of related party interest expense, totaled $1,014,657 and $1,607,398 for the years ended December 31, 2021 and 2020, respectively. Unamortized debt issuance costs on the Amended Bridge Notes totaled $0 and $5,771 as of December 31, 2021 and 2020, respectively. Amortization of the debt discount on the Amended Bridge Notes totaled approximately $869,600 and $136,185 for the years ended December 31, 2021 and 2020, respectively. Conversion of Bridge Notes Upon the completion of the IPO, the Company converted $4,000,000 of its outstanding principal and accrued interest of $717,646 of the Bridge Notes, as amended, into 842,429 shares of common stock at a conversion price of $5.60 per share. The Company recognized a gain on the conversion of $9,746. The conversion of the Amended Bridge Notes and Convertible Notes upon the consummation of the IPO resulted in an increase in total stockholder's equity of $16,392,344. The components of this non-cash transaction are as follows for the year ended December 31, 2021: Write off of derivative liability relating to the Convertible Notes $ 2,644,000 Extinguishment of Convertible Notes principal 5,486,199 Accrued and unpaid interest on the Convertible Notes 1,257,066 Accumulated amortization on debt issuance costs 33,035 Loss on extinguishment of Convertible Notes 260,185 Write off of debt issuance costs (27,573) Write off of derivative liability relating to the Bridge Notes 2,031,300 Extinguishment of Bridge Notes principal 4,000,000 Accrued and unpaid interest on the Bridge Notes 717,646 Gain on extinguishment of Bridge Notes (9,514) Total conversion of Convertible Notes and Bridge Notes into common stock $ 16,392,344 During the third quarter of 2021, the Company paid off remaining principal of $3,000,000 and accrued interest of $64,110. As of December 31, 2021, there were no Bridge Notes outstanding. Term Loan On August 13, 2021 (the "Closing Date"), the Company entered into a Term Loan with Western Alliance Bank (the "Lender") in the amount of $3,500,000 for working capital needs. The Company has the option to request an additional advance in the amount of $1,500,000, which the Company has not yet borrowed as of December 31, 2021. The additional advance of $1,500,000 is available to the Company during the "Draw Period," which is defined in the Term Loan as the "period commencing on the Closing Date and ending the earlier to occur of (a) February 13, 2023, and (b) an Event of Default." The Term Loan bears interest at a rate equal to three-quarters of one percent (0.75%) above the Prime Rate. As of December 31, 2021, the interest rate on the Term Loan is 4.00% which is equal to 0.75% above the Prime Rate of 3.25 %. Interest is due and payable on the tenth ( 10 th) calendar day of each month during the term of the Term Loan. The Term Loan principal is payable in thirty ( 30 ) equal monthly installments, plus accrued interest, beginning on March 10, 2023, and continuing on the same day of each month through August 10, 2025 (the "Term Loan Maturity Date"), at which time all amounts shall be immediately due and payable. The Company shall have the option to prepay all, but not less than all, of the outstanding loan balance, provided the Company a) delivers written notice to the financial institution of their election to prepay such Term Loan at least ten (10) days prior to such prepayment and b) pay, on the date of such prepayment, (1) all outstanding principal with respect to the Term Loan, plus accrued but unpaid interest, plus (2) all fees (including any late fee), and other sums, including bank expenses, if any, that shall have become due and payable. The Lender which holds the Term Loan is granted a security interest in substantially all assets of the Company (“Collateral”). The Term Loan contains certain covenants that the Company considers usual and customary for an agreement of this type for comparable commercial borrowers, and as of December 31, 2021 we were in compliance with all Term Loan covenants. The outstanding principal balance on the Term Loan was $3,500,000 as of December 31, 2021. Interest expense on the Term Loan totaled $47,444 and $0 for the years ended December 31, 2021 and 2020, respectively. Debt issuance costs totaled $81,989, comprised of a warrant to purchase 12,500 shares of common stock issued to the Lender with a fair value of $49,072 (the "Lender Warrant"), fees paid of $23,066 to the Lender and legal costs of $9,851. Amortization of the debt issuance costs related to the Term Loan, included in interest expense on the statement of operations, totaled $5,175 and $0 for the years ended December 31, 2021 and 2020, respectively. Unamortized debt issuance costs on the Term Loan totaled $77,384 and $0 at December 31, 2021 and 2020, respectively. As of December 31, 2021, future minimum payments related to long-term debt is as follows: Year Ending December 31, Amount Due 2022 $ — 2023 1,166,667 2024 1,400,000 2025 933,333 Total 3,500,000 Less debt issuance cost (77,384) Long-term debt, net $ 3,422,616 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Leases The Company has one operating lease of office space in Lexington, Massachusetts that will expire on February 28, 2024. Leases with an initial term of twelve months or less are not recorded on the balance sheet date, and the Company does not separate lease and non-lease components of contracts. There are no material residual guarantees associated with any of the Company’s leases, and there are no significant restrictions or covenants included in the Company’s lease agreements. The Company’s lease agreement does not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived an imputed rate, which was used to discount its real estate lease liabilities. The Company used estimated incremental borrowing rates for its active real estate lease. The calculated incremental borrowing rate was 5.96%, which was calculated based on remaining lease term of 1.92 years as of January 1, 2022. There was no sublease rental income for the three months ended March 31, 2022, and the Company is not the lessor in any lease arrangement, and there were no related-party lease agreements. Undiscounted Cash Flows Future lease payments included in the measurement of lease liabilities on the balance sheet are as follows: 2022 (excluding three months ended March 31, 2022) $ 122,631 2023 165,254 2024 27,601 Total future minimum lease payments 315,486 Less effect of discounting (18,104) Present value of future minimum lease payments $ 297,382 Rent expense for the three months ended March 31, 2022 and 2021 amounted to $44,957 and $40,178, respectively. Cash Flows Supplemental cash flow information related to operating lease for the three months ended March 31, 2022 was as follows: Non-cash operating lease expense (operating cash flow) $ 36,291 Change in operating lease liabilities (operating cash flow) $ (35,741) Supplemental non-cash amounts of operating lease liabilities arising from obtaining right-of-use assets $ 333,123 Legal Proceedings From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and misclassification, intellectual property, commercial or contractual claims, or other consumer protection statutes. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. As of March 31, 2022, there was no material litigation against the Company. | 8. Leases The Company leases its office space in Lexington, Massachusetts under a non-cancelable operating lease that was entered into in September 2012 and most recently amended on April 10, 2017. The lease requires monthly rental payments, presented by year in the table below, which escalate during the lease term and expires on February 28, 2024. The difference between straight-line rent expense and rent paid is immaterial. Year Ending December 31, Operating Leases 2022 $ 163,158 2023 165,254 2024 27,601 Total $ 356,013 Rent expense for the years ended December 31, 2021 and 2020 amounted to $167,167 and $136,281, respectively. Legal Proceedings From time to time the Company is involved in litigation, claims, and other proceedings arising in the ordinary course of business. Such litigation and other proceedings may include, but are not limited to, actions relating to employment law and misclassification, intellectual property, commercial or contractual claims, or other consumer protection statutes. Litigation and other disputes are inherently unpredictable and subject to substantial uncertainties and unfavorable resolutions could occur. As of December 31, 2021, there was no material litigation against the Company. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
STOCKHOLDERS' EQUITY | ||
STOCKHOLDERS' EQUITY | 7. STOCKHOLDERS’ EQUITY The Company’s authorized capital is 250,000,000 shares, of which (1) 200,000,000 shares are common stock, par value $0.0001 per share and (2) 50,000,000 are preferred stock, par value $0.0001 per share, which may, at the sole discretion of the Company’s board of directors be issued in one or more series. Common Stock During the three months ended March 31, 2022, the Company issued 77,679 shares of common stock for cash exercises of options of $75,277. Warrants Underwriter Warrants In connection with the Company's underwriting agreement with ThinkEquity, a division of Fordham Financial Management, Inc. and the representative of the Company’s IPO underwriters Lender Warrant In connection with the Term Loan entered into on August 13, 2021, the Company issued a Lender Warrant to Lender to purchase 12,500 shares of common stock of the Company. The Lender Warrant is exercisable at a per share exercise price of $8.00 and is exercisable at any time on or after August 13, 2021 through August 12, 2031. The Company determined that the Lender Warrant was equity-classified. As of March 31, 2022, the Lender Warrant had not been exercised, and had a weighted average exercise price of $12.06 per share and a remaining weighted average time to expiration of 9.38 years. PIPE Warrants On December 1, 2021, the Company completed a private placement (the “PIPE”) in which the Company issued warrants (the “PIPE Warrants”) to purchase up to an aggregate of 1,312,500 shares of common stock. These PIPE Warrants have an exercise price of $13.00 per share and are immediately exercisable upon issuance and will expire on the five- and one-half-year anniversary of the issuance date. As of March 31, 2022, the PIPE Warrants had not been exercised, The following assumptions were used to estimate the fair value of warrants granted using the Black-Scholes-Merton option pricing model during the three months ended March 31: 2022 2021 Assumptions: Risk-free interest rate — 0.90% - 1.30% Expected term (in years) — 5.00 10.00 Expected volatility — 59% - 69% Expected dividend yield — — A summary of warrant activity during the three months ended March 31, 2022 was as follows: Weighted Average Weighted Remaining Warrants Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2021 1,415,000 $ 9.76 5.34 Granted — — — Exercised — — — Cancelled/forfeited — — — Balance at March 31, 2022 1,415,000 $ 9.76 5.22 | 9. Pursuant to the Company's fourth amended and restated certificate of incorporation dated June 17, 2021, the Company's authorized capital is 250,000,000 shares, of which (1) 200,000,000 shares are common stock, par value $0.0001 per share and (2) 50,000,000 are preferred stock, par value $0.0001 per share, which may, at the sole discretion of the Company's board of directors be issued in one or more series. Redeemable Convertible Preferred Stock Upon the consummation of the IPO, 1,291,012 shares of outstanding preferred stock automatically converted into 1,291,012 shares of common stock. As of December 31, 2021, there were no shares of preferred stock outstanding. Common Stock The Company issued 2,250,000 shares of common stock in connection with the IPO during the year ended December 31, 2021. Additionally, the Company issued 1,206,614 shares of common stock in connection with the conversion of all the Convertible Notes and accrued interest and 842,429 shares of common stock in connection with the conversion of $4.7 million of the outstanding principal and accrued interest on the Bridge Notes. On July 1, 2021, the Company issued and sold 337,500 additional shares of common stock, pursuant to the underwriters' exercise of its overallotment option, at a public offering price of $8.00 per share, for aggregate gross proceeds of $2.7 million. The net proceeds from the overallotment were $2.5 million after deducting underwriting discounts of $0.2 million. Inclusive of the underwriters' option to purchase additional shares, the Company received approximately $18.2 million in net proceeds from the IPO, after deducting underwriting discounts of $1.9 million and other offering costs of $0.6 million. On August 1, 2021, the Company issued 2,000 shares of common stock in exchange for investor relations services. The shares of common stock had a fair value of $6.25 per share for a total aggregate value of $12,500. On December 1, 2021, the Company completed a PIPE in which the Company issued and sold 1,749,999 shares of common stock and the warrants to purchase up to an aggregate of 1,312,500 shares of common stock, at a combined purchase price of $12.00 per share for aggregate gross proceeds of approximately $21 million. The net proceeds from the PIPE were $19.6 million after deducting placement agent commissions of $1.26 million and other offering costs . Warrants During the year ended December 31, 2021, warrant holders exercised 17,889 warrants to purchase common stock, resulting in the issuance of 17,889 shares of common stock for total proceeds of $992. As of December 31, 2021, 5,420 warrants expired, and were not exercised. Underwriter Warrants In connection with the Company's underwriting agreement with ThinkEquity, the Company entered into a warrant agreement to purchase up to 90,000 shares of common stock, par value $0.0001 (the "Underwriter Warrant"). The Underwriter Warrant is exercisable at a per share exercise price of $10.00 and is exercisable at any time and from time to time, in whole or in part, during the four- and one-half year period commencing 180 days from the effective date of the registration statement. The Warrant became exercisable on or after December 16, 2021 (six months from the effective date of the offering) and expires on June 15, 2026. Upon issuance of these warrants, as partial compensation for its services as an underwriter, the fair value of approximately $0.4 million was recorded as equity issuance costs. Lender Warrant In connection with the Term Loan entered into on August 13, 2021, the Company issued a Lender Warrant to purchase 12,500 shares of common stock to the Lender. The Lender Warrant is exercisable at a per share exercise price of $8.00 and is exercisable at any time on or after August 13, 2021 through August 12, 2031. The Company determined that the Lender Warrant is equity-classified. As of December 31, 2021, the Lender Warrant had not been exercised, and had a weighted average exercise price of $8.00 and a remaining weighted average time to expiration of 9.62 years. PIPE Warrants On December 1, 2021, the Company completed a PIPE in which the Company issued warrants to purchase up to an aggregate of 1,312,500 shares of common stock. These warrants have an exercise price of $13.00 and are immediately exercisable upon issuance and will expire on the five- and one-half-year anniversary of the issuance date The following assumptions were used to estimate the fair value of warrants granted using the Black-Scholes-Merton option pricing model during the years ended December 31: 2021 2020 Assumptions: Risk-free interest rate 0.90% - 1.30 % — % Expected term (in years) 5.00 - 10.00 — Expected volatility 59% - 69 % — % Expected dividend yield — % — % A summary of total warrant activity during the year ended December 31, 2021 is as follows: Weighted Average Remaining Options Weighted Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2019 — $ — — Granted 23,309 0.06 0.75 Exercised — — — Cancelled/forfeited — — — Balance at December 31, 2020 23,309 $ 0.06 0.75 Granted 1,415,000 12.77 5.34 Exercised (17,889) 0.06 — Cancelled/forfeited (5,420) 0.06 — Balance at December 31, 2021 1,415,000 $ 9.76 5.34 |
SHARE-BASED COMPENSATION_2
SHARE-BASED COMPENSATION | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | ||
SHARE-BASED COMPENSATION | 8. SHARE-BASED COMPENSATION Stock Options As of March 31, 2022, there were 112,206 and 217,414 shares of common stock available for future grants under the Company’s 2013 Stock Incentive Plan and 2021 Plan (defined below) (collectively, the “Plans”), respectively. The following assumptions were used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model during the three months ended March 31: 2022 2021 Assumptions: Risk-free interest rate — 0.47% – 0.64% Expected term (in years) — 5.81 – 5.85 Expected volatility — 49.88% –49.98% Expected dividend yield — — A summary of stock option activity under the Plans is as follows: Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Granted — — — — Exercised (77,679) 1.04 — 336,632 Cancelled/forfeited (1,326) 1.00 — Balance at March 31, 2022 176,142 $ 1.18 8.01 $ 500,420 Options exercisable at March 31, 2022 135,786 $ 1.25 7.09 $ 559,850 The aggregate intrinsic value in the table above represents the difference between the Company's stock price as of the balance sheet date and the exercise price of each in-the-money option on the last day of the period. The total intrinsic value of stock options exercised was approximately $336,632 during the three months ended March 31, 2022. There were no options exercised during the three months ended March 31, 2021. The weighted average grant date fair value of stock options issued in the three months ended March 31, 2022 and 2021 was $0 and $1.77, respectively. The Company recorded stock options compensation expense as follows for the three months ended March 31: 2022 2021 Operating expenses: General and administrative $ 26,337 $ 9,104 Sales and marketing 1,075 1,950 Fulfillment 825 1,469 Supply development 306 288 Technology 1,012 9,225 Total stock options expense $ 29,555 $ 22,036 A total of $212,195 of unamortized compensation expense at March 31, 2022 will be recognized over the remaining requisite service period of 2.1 years. During the three months ended March 31, 2022, the Company received proceeds of $75,277 from the exercise of stock options. 2021 Stock Incentive Plan On June 16, 2021, the Company adopted the iSpecimen Inc. 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan was adopted to enhance the Company’s ability to attract, retain and motivate employees, officers, directors, consultants and advisors by providing such persons with equity ownership opportunities and performance-based incentives. The 2021 Plan authorizes options, restricted stock, RSUs and other stock-based awards. The Company's board of directors, or any committee to which the board of directors delegates such authority, has the sole discretion in administering, interpreting, amending or accelerating the 2021 Plan. Awards may be made under the 2021 Plan for up to 608,000 shares of the Company's common stock, and the 2021 Plan was made effective with the completion of the IPO. During the three months ended March 31, 2022, 11,000 equity awards were issued under the 2021 Plan. Restricted Stock Units Total recognition of RSUs expense to employees was as follows for the three months ended March 31: 2022 Operating expenses: General and administrative $ 7,932 Sales and marketing 14,167 Fulfillment 13,631 Supply development 7,196 Technology 13,400 Total RSU expense $ 56,326 These RSUs are subject to one-year cliff vesting, with 25% of the RSUs vesting on the first anniversary of issuance. The remaining RSUs vest quarterly over a three-year period. As of March 31, 2022, unrecognized stock-based compensation expense related to the unvested employee RSUs was $835,347, which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 3.40 years. During the three months ended March 31, 2021, there were no RSUs issued. During July 2021, the Company granted 189,396 RSUs to members of the executive team. Stock compensation expense of $78,955 was recorded in general and administrative expense for the three months ended March 31, 2022. These RSUs are subject to a four-year vesting period, with 20% of the RSUs vesting immediately upon issuance. The remaining RSUs vest annually over a four-year period. As of March 31, 2022, unrecognized stock-based compensation expense related to the unvested RSUs was $727,261 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 3.23 years. During July 2021, the Company granted 12,500 RSUs to its directors. Stock compensation expense of $19,356 was recorded in general and administrative expense for the three months ended March 31, 2022. These RSUs vest quarterly over a one-year period. As of March 31, 2022, unrecognized stock-based compensation expense related to these unvested RSUs was $26,023 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 0.25 Weighted RSUs Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2021 285,542 $ 6.77 Granted 11,000 4.06 Vested (3,125) 6.28 Forfeited (2,250) 1.27 Unvested Balance at March 31, 2022 291,167 $ 6.68 Performance Stock Units During July 2021, the Company issued 47,349 performance stock units (“PSUs”) to four members of the executive team pursuant to each executive's employment agreement executed in connection with the IPO. The PSUs are subject to certain performance obligations relating to certain revenue and cost of revenue metrics to be determined at the beginning of each fiscal year within the four year vesting period. In year one of the four-year vesting period, the Company was not able to predict the likelihood of achieving the targets pursuant to the metrics in each of the executives' employment agreements, and therefore no stock compensation expense was recognized for the three months ended March 31, 2022. | 10. SHARE-BASED COMPENSATION Stock Options As of December 31, 2021, there were 105,845 and 226,164 shares of common stock available for future grants under the Company's 2013 Stock Incentive Plan and 2021 Stock Incentive Plan, respectively. The following assumptions were used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model during the years ended December 31: 2021 2020 Assumptions: Risk-free interest rate 0.47% – 0.66 % 0.30% – 1.41 % Expected term (in years) 5.81 – 5.89 5.32 – 6.14 Expected volatility 49.83% –49.98 % 43.11% – 50.14 % Expected dividend yield — % — % A summary of stock option activity under the 2013 Stock Incentive Plan and 2021 Stock Incentive Plans is as follows: Weighted Average Remaining Options Weighted Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at January 1, 2019 224,884 $ 1.08 8.78 $ — Granted 43,259 1.00 — — Exercised — 1.00 — — Cancelled/forfeited (16,296) 4.20 — — Balance at December 31, 2020 251,847 $ 1.00 8.06 $ 89,100 Granted 70,164 5.74 9.34 432,520 Exercised (55,694) 1.00 — 379,276 Cancelled/forfeited (11,170) 1.00 — — Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Options exercisable at December 31, 2021 179,711 $ 1.12 7.04 $ 1,219,964 The aggregate intrinsic value in the table above represents the difference between the Company's stock price as of the balance sheet date and the exercise price of each in-the-money option on the last day of the period. The total intrinsic value of stock options exercised was approximately $379,276 and $0 and during the year ended December 31, 2021 and 2020, respectively. The weighted-average grant date fair value of stock options issued in the years ended December 31, 2021 and 2020 was $3.94 and $0.55, respectively. The Company recorded compensation expense as follows for years ended December 31, 2021 and 2020: 2021 2020 Operating expenses: General and administrative $ 257,005 $ 38,367 Sales and marketing 55,035 8,216 Fulfillment 41,482 6,193 Supply development 8,138 1,215 Technology 260,404 38,875 Total $ 622,064 $ 92,866 A total of $432,520 of unamortized compensation expense at December 31, 2021, will be recognized over the remaining requisite service period of 2.4 years. During 2021 and 2020, the Company received proceeds of $58,648 and $0 from the exercise of stock options, respectively. 2021 Stock Incentive Plan On June 16, 2021, the Company adopted the iSpecimen Inc. 2021 Stock Incentive Plan (“the 2021 Plan”). The 2021 Plan was adopted to enhance our ability to attract, retain and motivate employees, officers, directors, consultants and advisors by providing such persons with equity ownership opportunities and performance-based incentives. The 2021 Plan authorizes options, restricted stock, restricted stock units and other stock-based awards. The Company's Board of Directors, or any committee to which the Board of Directors delegates such authority, has the sole discretion in administering, interpreting, amending or accelerating the 2021 Plan. Awards may be made under the 2021 Plan for up to 608,000 shares of the Company's common stock, and the 2021 Plan was made effective with the completion of the IPO. During the year ended December 31, 2021, 381,836 equity awards were issued from the 2021 Plan. Restricted Stock Units During the year ended December 31, 2021, the Company granted 127,350 restricted stock units to employees, resulting in recognition of the following expense : 2021 Operating expenses: General and administrative $ 6,453 Fulfillment 21,824 Sales and marketing 25,686 Supply development 13,304 Technology 18,290 Total $ 85,557 These restricted stock units are subject to one three During July 2021, the Company granted 189,396 restricted stock units to members of the executive team, resulting in expense of $394,555 recorded in general and administrative expense and technology. These restricted stock units are subject to a four year vesting period, with 20% of the units vesting immediately upon issuance. The remaining restricted stock units vest annually over a four-year period. As of December 31, 2021, unrecognized stock-based compensation expense related to the unvested restricted stock units was $806,216 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 3.47 years. During July 2021, the Company granted 12,500 restricted stock units to board directors, resulting in expense of $33,121 recorded in general and administrative expense and technology. These restricted stock units vest quarterly over a one-year period. As of December 31, 2021, unrecognized stock-based compensation expense related to these unvested restricted stock units was $45,379 which the Company expects to recognize on a straight-line basis over a weighted average period of approximately 0.50 years. During the year ended December 31, 2020, no restricted stock units were granted by the Company, nor were there any outstanding. Options Weighted Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2020 — $ — Granted 329,246 6.71 Vested (44,129) 6.33 Forfeited (2,700) 6.34 Unvested Balance at December 31, 2021 282,417 $ 6.78 Performance Stock Units During July 2021, the Company issued 47,349 performance stock units to four members of the executive team pursuant to each executive's employment agreement executed in connection with the IPO. The performance stock units are subject to certain performance conditions relating to certain revenue and cost of revenue metrics to be determined at the beginning of each fiscal year within the four year vesting period. In year one of the four-year vesting period, the Company was not able to predict the likelihood of achieving the targets pursuant to the metrics in each of the executives' employment agreements, and therefore no stock compensation expense was recognized for the year ended December 31, 2021. |
INCOME TAXES_2
INCOME TAXES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
INCOME TAXES | ||
INCOME TAXES | 9. INCOME TAXES As of March 31, 2022 and December 31, 2021, the Company had federal net operating loss carryforwards of approximately $32,500,000 and $30,300,000, respectively, of which approximately $13,000,000 expires at various periods through 2037 and approximately $19,500,000 and $17,300,000, respectively, can be carried forward indefinitely. As of March 31, 2022 and December 31, 2021, the Company had state net operating loss carryforwards of approximately $23,400,000 and $22,400,000, respectively, that expire at various periods through 2042, respectively. At March 31, 2022 and December 31, 2021, the Company had federal and state tax credits of approximately $900,000 and $850,000, respectively, available for future periods that expire at various periods through 2042. The Company has recorded a full valuation allowance against net deferred income tax assets due to a history of losses generated since inception. | 11. There was no provision for income taxes for the years ended December 31, 2021 and 2020 due to the Company’s operating losses and a full valuation allowance on deferred tax assets. The Company completed research and development studies covering all tax years currently under the applicable statute of limitations. The benefits of the study are reflected in the 2021 and 2020 financial statements as a tax credit receivable in the amount of approximately $141,000 Significant components of the Company’s deferred tax assets and liabilities as of December 31 are as follows: 2021 2020 Deferred tax assets: Operating loss carryforwards $ 7,775,000 $ 6,600,000 Research and development tax credit 850,000 700,000 Other 325,000 700,000 Total deferred tax assets 8,950,000 8,000,000 Deferred tax liability: Intangibles (300,000) (250,000) Total deferred tax liabilities (300,000) (250,000) Net deferred tax assets before valuation allowance 8,650,000 7,750,000 Valuation allowance (8,650,000) (7,750,000) Net deferred tax asset $ — $ — The Company has provided a valuation allowance against the deferred tax assets as it has incurred significant losses since its inception. Management currently believes that it is more likely than not that the deferred tax assets will not be realized in the future. The change in the valuation allowance during 2021 was an increase of $900,000. At December 31, 2021, the Company had federal net operating loss (“NOL”) carryforwards of approximately $30,300,000 of which approximately $13,000,000 expire at various periods through 2037 and approximately $17,300,000 can be carried forward indefinitely. The Company also had state NOL carryforwards of approximately $22,400,000 that expire at various periods through 2041. At December 31, 2021, the Company had federal and state tax credits of approximately $850,000 available for future periods that expire at various periods through 2041. Due to changes in ownership provisions of the Internal Revenue Code, the availability of the Company's NOL carryforwards may be subject to annual limitations under Section 382 of the Internal Revenue Code against taxable income in the future period, which could substantially limit the eventual utilization of such carryforwards. The Company applies the standards on uncertainty in income taxes. The Company did not have any significant unrecognized tax benefits during the year ended December 31, 2020. The Company’s U.S. federal operating losses have occurred since its inception and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities. The Company’s income tax provision was computed using the federal statutory rate and average state statutory rates, net of related federal benefit. The following represents a reconciliation of the statutory income tax rates to the effective rates at December 31: 2021 2020 Reconciliation to statutory rates Expected federal income taxes benefit at statutory rates (21.0) % (21.0) % Expected state tax benefit at statutory rates, net of federal benefit (8.0) (8.0) Change in valuation allowance 25.7 29.0 Forgiveness of PPP Loan 3.3 — Income tax expense (benefit) — % — % |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 10. SUBSEQUENT EVENTS Restricted Stock Units Pursuant to the 2021 Plan, the Company granted 107,326 RSUs to employees in April 2022. Each RSU represents the right to receive one share of the Company’s common stock, subject to the terms and conditions set forth in the RSU award agreement and the 2021 Plan. The RSUs vest as follows: 25% from the one-year anniversary of the vesting start date, and then the remainder of the shares will time-vest quarterly beginning fifteen months after the vesting start date and then every three months thereafter, through the fourth yearly anniversary of the vesting start date. Waiver of Violation of Debt Covenant In connection with the Term Loan, on April 25, 2022, the Company became aware that an event of default by the Company had occurred by reason of the Company’s violation of a financial covenant for the three months ended March 31, 2022 (the “Event of Default”), as set forth in the Company’s Term Loan with the Lender (see Note 5). On April 29, 2022, the Company and the Lender entered into a waiver (the “Waiver”), pursuant to which the Lender agreed to waive the Event of Default and the Company agreed to release the Lender from all its claims from the beginning of the time through and including the date of the Waiver, whether they relate to the Term Loan, the covenants or any other claims that the Company ever had or currently has against the Lender . |
SUMMARY OF SIGNIFICANT ACCOU_13
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Use of Estimates | Use of Estimates The preparation of the Company’s unaudited condensed financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. | Use of Estimates The preparation of the Company’s financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company utilizes certain estimates in the determination of the fair value of its common stock and warrants, deferred tax valuation allowances, revenue recognition, share-based compensation, and accrued expenses amongst others. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results could differ from such estimates. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of March 31, 2022 and December 31, 2021 because of their short-term nature. | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value: Ø Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets. Ø Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Ø Level 3 — Valuations based on unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment . For certain financial instruments, including cash, accounts receivable, and accounts payable, the carrying amounts approximate their fair values as of December 31, 2021 and 2020 because of their short-term nature. The liability in connection with conversion features included within certain of the Company’s convertible notes payable was classified as a derivative liability for embedded conversion features on the balance sheets and is considered to be a Level 3 liability. |
Revenue Recognition and Accounts Receivable | Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five-step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the Company satisfies the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for the Company’s medical research customers using the Company’s proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to the Company’s customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for the Company’s customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of the Company’s proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within the Company’s network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, which can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of the Company’s revenue recognition policy. The Company has concluded that it acts as principal in the arrangement as it manages the procurement process from beginning to end and determines which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as the Company has created an asset with no alternative use to the Company which has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract, and related order upon receipt, to determine if the specimen ordered has an alternative use by us. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. In the rare circumstances where specimens do have an alternative future use, the Company's performance obligation is satisfied at the time of shipment. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which the Company has an enforceable right to payment, has been accessioned, the Company records the offset to revenue in accounts receivable — unbilled. Once the specimen has been shipped and invoiced, a reclassification is made from accounts receivable — unbilled to accounts receivable. Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. The Company has a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, the Company has given the customer a credit for the returns. The Company has not recorded a returns allowance. The following table summarizes the Company’s revenue for the three months ended March 31: 2022 2021 Specimens – contracts with customers $ 2,372,386 $ 2,947,295 Shipping and other 146,274 16,512 Revenue $ 2,518,660 $ 2,963,807 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of March 31, 2022 and December 31, 2021, the Company had an allowance for doubtful accounts of $184,837 and $269,170, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. | Revenue Recognition and Accounts Receivable The Company recognizes revenue using the five step approach as follows: (1) identify the contract with the customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) we satisfy the performance obligations. The Company generates revenue by procuring various specimens from hospitals, laboratories, and other supply sites, for our medical research customers using our proprietary software, the iSpecimen Marketplace, to identify, locate, and ultimately validate the required specimens to our customers’ requested specifications. The Company’s performance obligation is to procure a specimen meeting the customer specification(s) from a supplier, on a “best efforts” basis, for our customer at the agreed price per specimen as indicated in the customer contract with the Company. The Company does not currently charge suppliers or customers for the use of our proprietary software. Each customer will execute a material and data use agreement with the Company or agrees to online purchase terms, each of which includes terms such as specimen and data use, shipment terms, payment and cancellation terms. These are then supplemented by purchase orders that specify specimen requirements including detailed inclusion/exclusion criteria, quantities to be collected, and pricing. Collectively, these customer agreements represent the Company’s contracts with its customer. Generally, contracts have fixed unit pricing. For certain specimen orders, a refundable customer deposit may be required prior to order fulfillment depending on project set-up requirements, presented as deferred revenue. The Company expects to recognize the deferred revenue within the next twelve months. Specimen collections occur at supply sites within our network. “Collection” is when the specimen has been removed, or “collected” from the patient or donor. A specimen is often collected specifically for a particular Company order. Once collected, the specimen is assigned by the supplier to the Company and control of the specimen passes to the Company. “Accession” is the process whereby a collected specimen and associated data are registered and assigned in the iSpecimen Marketplace to a particular customer order, can occur while a specimen is at the supplier site or while at the Company site and is when control of the specimen passes to the customer. Suppliers may ship specimens to the Company or directly to the customer, if specimens must be delivered within a short time period (less than 24 hours after collection) or shipping to the Company is not practical. The Company has evaluated principal versus agent considerations as part of our revenue recognition policy. The Company has concluded that we act as principal in the arrangement as we manage the procurement process from beginning to end and determine which suppliers will be used to fulfill an order, usually take physical possession of the specimens, set prices for the specimens, and bear the responsibility for customer credit risk. The Company recognizes revenue over time, as we have created an asset with no alternative use to the Company and has an enforceable right to payment for performance completed to date. At contract inception, the Company reviews a contract and related order upon receipt to determine if the specimen ordered has an alternative use by us. In the rare circumstances where specimens do have an alternative future use, our performance obligation is satisfied at the time of shipment. Generally, specimens ordered do not have an alternative future use to the Company and the performance obligation is satisfied when the related specimens are accessioned. The Company uses an output method to recognize revenue for specimens with no alternative future use. The output is measured based on the number of specimens accessioned. Customers are typically invoiced upon shipment. Depending on the quantity of specimens ordered, it may take several accounting periods to completely fulfill a purchase order. In other words, there can be multiple invoices issued for a single purchase order, reflecting the specimens being accessioned over time. However, specimens are generally shipped as soon as possible after they have been accessioned. Once a specimen that has no alternative future use, and for which we have an enforceable right to payment, has been accessioned, we record the offset to revenue in accounts receivable — Customers are generally given fourteen days from the receipt of specimens to inspect the specimens to ensure compliance with specifications set forth in the purchase order documentation. Customers are entitled to either receive replacement specimens or receive reimbursement of payments made for such specimens. We have a nominal history of returns for nonacceptance of specimens delivered. When this has occurred, we have given the customer a credit for the returns. We have not recorded a returns allowance. The following table summarizes the Company’s revenue for the years ended December 31: 2021 2020 Specimens – contracts with customers $ 10,944,255 $ 8,086,324 Shipping and other 191,048 97,782 Revenue $ 11,135,303 $ 8,184,106 The Company carries its accounts receivable at the invoiced amount less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable to determine if an allowance for doubtful accounts is necessary, based on economic conditions and each customer’s payment history. Receivables are written off when deemed uncollectible, with any future recoveries recorded as income when received. As of December 31, 2021, and 2020, the Company had an allowance for doubtful accounts of $269,170 and $108,096, respectively. The Company applies the practical expedient to account for shipping and handling activities as fulfillment cost rather than as a separate performance obligation. Shipping and handling costs incurred are included in cost of revenue. |
Internally Developed Software, Net | Internally Developed Software, Net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology costs and are expensed to operations as incurred. | Internally Developed Software, net The Company capitalizes certain internal and external costs incurred during the application development stage of internal-use software projects until the software is ready for its intended use. Amortization of the asset commences when the software is complete and placed into service and is recorded in operating expenses. The Company amortizes completed internal-use software over its estimated useful life of five years on a straight-line basis. Costs incurred during the planning, training and post-implementation stages of the software development life cycle are classified as technology and are expensed to operations as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the three months ended March 31, 2022 and 2021. | Impairment of Long-Lived Assets Management reviews long-lived assets for impairment when circumstances indicate the carrying amount of an asset may not be recoverable. An impairment loss is recognized when expected cash flows are less than the asset’s carrying value. Long-lived assets consist of property and equipment and internal-use software. No impairment charges were recorded for the years ended December 31, 2021 and 2020. |
Share-Based Compensation | Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of Company-specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 per share at March 31, 2021. Restricted Stock Units The Company recognizes share-based compensation expense from restricted stock units (the “RSUs”) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. | Share-Based Compensation The Company records share-based compensation for options granted to employees, non-employees, and to members of the board of directors for their services on the board of directors based on the grant date fair value of awards issued, and the expense is recorded on a straight-line basis over the requisite service period. Forfeitures are recognized when they occur. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The use of the Black-Scholes-Merton option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. The Company has concluded that its historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term. Therefore, the expected term was determined according to the simplified method, which is the average of the vesting tranche dates and the contractual term. Due to the lack of company specific historical and implied volatility data, the estimate of expected volatility is primarily based on the historical volatility of a group of similar companies that are publicly traded. For these analyses, companies with comparable characteristics are selected, including enterprise value and position within the industry, and with historical share price information sufficient to meet the expected life of the share-based awards. The Company computes the historical volatility data using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of its share-based awards. The risk-free interest rate is determined by reference to U.S. Treasury zero-coupon issues with remaining maturities similar to the expected term of the options. The Company has not paid, and does not anticipate paying, cash dividends on shares of its common stock. Subsequent to the IPO, the fair value of the Company's common stock was equal to the closing price on the specified grant date. Prior to the IPO, in order to determine the fair value of the Company’s common stock, the Company considered, among other things, contemporaneous valuations of the Company’s common stock, the Company’s business, financial condition and results of operations, including related industry trends affecting its operations; the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale, given prevailing market conditions; the lack of marketability of the Company’s common stock; the market performance of comparable publicly traded companies; and U.S. and global economic and capital market conditions. The fair value of the Company’s common stock was estimated to be $3.83 at December 31, 2020. The Company conducted multiple valuations throughout the year ended December 31, 2020 and the estimate of the fair value of the Company’s common stock ranged from $0.39 and $3.83 as a result of the changes in the factors described above. Restricted Stock Units (RSUs) The Company recognizes share-based compensation expense from restricted stock units (RSUs) ratably over the specified vesting period. The fair value of RSUs is determined to be the closing share price of the Company's common stock on the grant date. |
Common Stock Warrants | Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 7. | Common Stock Warrants The Company accounts for common stock warrants as either equity instruments or liabilities, depending on the specific terms of the warrant agreement. The warrants shall be classified as a liability if 1) the underlying shares are classified as liabilities or 2) the entity can be required under any circumstances to settle the warrant by transferring cash or other assets. The measurement of equity-classified nonemployee share-based payments is generally fixed on the grant date and are considered compensatory. For additional discussion on warrants, see Note 9. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides common stock equivalents excluded from diluted net loss per share as of March 31: 2022 2021 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of RSUs 291,167 — Shares issuable upon exercise of stock options 176,142 265,102 Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants (defined below) to purchase common stock 90,000 — | Net Loss Per Share Basic net loss per share is calculated by dividing net loss applicable to common stockholders by the weighted- average number of shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is calculated by adjusting the weighted-average number of shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury-stock method. For purposes of the diluted net loss per share calculation, the potential impact of shares to be issued upon conversion of Series A, Series A-1 and Series B preferred stock, stock options, and warrants to purchase common stock are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share, as their effect would be anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share applicable to common stockholders were the same for all periods presented. The table below provides total shares outstanding, as of December 31: 2021 2020 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of restricted stock units 282,417 — Shares issuable upon exercise of stock options 255,147 251,847 Shares issuable upon exercise of PIPE Warrant to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants to purchase common stock 90,000 — |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which modifies ASC 740 to reduce complexity while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 is effective for the Company for interim and annual reporting periods beginning after December 15, 2021. The Company adopted this new standard as of January 1, 2022, but it did not have a material impact on the Company’s financial statements. In February 2016, the FASB established Topic 842, Leases, by issuing ASU No. 2016-02 (“ASU 2016-02”), which requires lessees to recognize leases on balance sheet and disclose key information about leasing arrangements. The new standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In June 2020, the FASB issued ASU No. 2020-05 (“ASU 2020-05”) which pushed back the effective date of the adoption of ASC 842 one year for private and not-for-profit entities that did not issue or serve as conduit bond obligors and had not yet adopted the standard. The new effective date was for fiscal year periods beginning after December 15, 2021. The Company adopted ASU 2016-02 effective January 1, 2022 using the Comparatives Under 840 transition method whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition, the Company elected the transition package of three practical expedients permitted within the standard, among other practical expedients which allowed the Company to carry forward prior conclusions about lease identification and classification which allows not separating lease and non-lease components and allows not recording leases with an initial term of twelve months or less on the balance sheet across all existing asset classes. Adoption of the new standard resulted in the balance sheet recognition of additional assets of $333,000 and lease liabilities of approximately $333,000. For additional information regarding the Company’s lease arrangements, see Note 6 in the notes to unaudited condensed financial statements. | Recent Accounting Standards From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected not to “opt out” of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, we will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company. Accounting Standards Issued, Not Yet Adopted In February 2016, the FASB issued ASU No. 2016-02, Leases In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes In August 2020, the FASB issued ASU No. 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity |
Reclassification | Reclassification Certain comparative figures have been reclassified to conform to the current year presentation. During 2021, the Company updated its accounting policy to allocate stock-based compensation costs to all departments. The costs were previously included only in general and administrative expenses. As a result of the reclassification, certain line items have been amended for the year ended December 31, 2020, in the statement of operations and the related notes to the financial statements. The reclassifications had no impact on the total operating expenses, net income or earnings per share for the year ended December 31, 2020. | |
Off-Balance Sheet Risk and Concentrations of Credit Risk | Off-Balance Sheet Risk and Concentrations of Credit Risk The Company has no significant off-balance sheet risks, such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Cash accounts are maintained at financial institutions that potentially subject the Company to concentrations of credit risk. At December 31, 2021 and 2020, substantially all of the Company’s cash was deposited in accounts at one financial institution. The Company maintains its cash deposits, which at times may exceed the federally insured limits, with a reputable financial institution and, accordingly, the Company believes such funds are subject to minimal credit risk. Concentration of credit risk with respect to accounts receivable is typically related to customers who account for a significant portion of revenue. During 2021, no customers represented greater than 10% of the Company’s revenues, one customer represented approximately 11% of accounts receivable and two customers represented approximately 23% and 17% of accounts receivable-unbilled at December 31, 2021. During 2020, two customers represented approximately 11% and 10% of the Company’s revenues, one customer represented approximately 10% of accounts receivable, and three customers represented approximately 23%, 13% and 11% of accounts receivable-unbilled at December 31, 2020. During the years ended December 31, 2021 and 2020, revenue attributable to customers located in foreign countries is approximately 7% and 6% of revenue, respectively. During the years ended December 31, 2021 and 2020, accounts receivable attributable to customers located in foreign countries is approximately 6% and 11% of accounts receivable, respectively. During the years ended December 31, 2021 and 2020, accounts receivable-unbilled attributable to customers located in foreign countries is approximately 11% and 0% of accounts receivable-unbilled, respectively. | |
Derivative Liability for Embedded Conversion Features | Derivative Liability for Embedded Conversion Features The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates its convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for separately. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other bifurcated embedded derivative instruments in the convertible instrument, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The result of this accounting treatment is that the fair value of the embedded derivative is recorded as a liability and marked-to-market each balance sheet date, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. | |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. When an item is sold or retired, the costs and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is credited or charged to income in the statement of operations. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the respective assets. A summary of estimated useful lives is as follows: Asset category Estimated Useful Life Website 3 years Computer equipment and purchased software 5 years Equipment 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life of asset or lease term Major improvements are capitalized while replacement, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed as incurred. | |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are recorded net against the related debt and amortized to interest expense over the life of the related debt. During the years ended December 31, 2021 and 2020, amortized debt issuance costs of $875,293 and $9,185 respectively, were recorded as a component of interest expense. | |
Cost of Revenue | Cost of Revenue Cost of revenue primarily consists of the purchase price to acquire specimens from hospitals and laboratories; inbound and outbound shipping costs; supply costs related to samples; payment processing and related transaction costs; and costs paid to the supply sites to support sample collections. Shipping costs upon receipt of products from suppliers are recognized in cost of revenue. For the year ended December 31, 2021, the Company acquired approximately 11%, 11%, 10% and 10% of specimens from four vendors. For the year ended December 31, 2020, the Company acquired approximately 21% of specimens from one vendor. | |
Technology | Technology Technology costs include payroll and related expenses for employees involved in the development and implementation of iSpecimen’s technology; software license and system maintenance fees; outsourced data center costs; data management costs; depreciation and amortization; and other expenses necessary to support technology initiatives. Collectively, these costs reflect the investments the Company makes in order to offer a wide variety of products and services to customers. Technology and data costs are generally expensed as incurred. A portion of technology costs are related to research and development. Costs incurred for research and development are expensed as incurred, except for software development costs that are eligible for capitalization. Research and development costs primarily include salaries and related expenses, in addition to the cost of external service providers. For the years ended December 31, 2021, and 2020, research and development costs totaled $295,305 and $319,235, respectively. | |
Sales and Marketing | Sales and Marketing Sales and marketing costs primarily consist of payroll and related expenses for personnel engaged in marketing and selling activities, including salaries and sales commissions; travel expenses; public relations and social media costs; ispecimen.com website development and maintenance costs; search engine optimization fees; advertising costs; direct marketing costs; trade shows and events fees; marketing and customer relationship management software; and other marketing-related costs. Advertising expenses consist primarily of marketing, public relations, and promotional materials. Advertising costs are expensed as incurred and totaled $229,223 and $111,304 for the years ended December 31, 2021 and 2020, respectively. | |
Supply Development | Supply Development The Company has agreements with supply partners that allow the Company to procure specimens from them and distribute these samples to customers. Supply development costs primarily include payroll and related expenses for personnel engaged in the development and management of this supply network; related travel expenses; regulatory compliance costs to support the network; and other supply development and management costs. | |
Fulfillment | Fulfillment Fulfillment costs primarily consist of those costs incurred in operating and staffing operations and customer service teams, including costs attributable to assess the feasibility of specimen requests; creating and managing orders; picking non-capitalizable, packaging, and preparing customer orders for shipment; responding to inquiries from customers; and laboratory equipment and supplies. | |
General and Administrative | General and Administrative General and administrative expenses primarily consist of costs for corporate functions, including payroll and related expenses for human resources, legal, finance, and executive teams; associated software licenses; facilities and equipment expenses, such as depreciation and amortization expense and rent, outside legal expenses, insurance costs, and other general and administrative costs. | |
Income taxes | Income Taxes The Company provides for income taxes using the asset and liability method. The Company provides deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the Company’s financial statement carrying amounts and the tax bases of assets and liabilities using enacted tax rates expected to be in effect in the years in which the differences are expected to reverse. A valuation allowance is provided to reduce the deferred tax assets to the amount that will more likely than not be realized. The Company does not have any material uncertain tax positions for which reserves would be required. The Company will recognize interest and penalties related to uncertain tax positions, if any, in income tax expense. | |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs are included in prepaid and other current assets and consists of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related to the planned initial public offering. The Company had approximately $265,000 of deferred offering costs related to the IPO which were recorded in other current assets on the balance sheet as of December 31, 2020. On June 21, 2021, the Company consummated its IPO; accordingly, the Company recognized deferred initial public offering costs of approximately $0.6 million as a reduction from gross proceeds associated with the IPO through additional paid-in capital in the accompanying condensed consolidated balance sheet. The Company recorded approximately $2.3 million of offering costs in additional paid-in capital in connection with the IPO. Accordingly, there were no deferred offering costs as of December 31, 2021. |
SUMMARY OF SIGNIFICANT ACCOU_14
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Summary of entity's revenue | 2022 2021 Specimens – contracts with customers $ 2,372,386 $ 2,947,295 Shipping and other 146,274 16,512 Revenue $ 2,518,660 $ 2,963,807 | 2021 2020 Specimens – contracts with customers $ 10,944,255 $ 8,086,324 Shipping and other 191,048 97,782 Revenue $ 11,135,303 $ 8,184,106 |
Schedule of estimated useful lives | Asset category Estimated Useful Life Website 3 years Computer equipment and purchased software 5 years Equipment 5 years Furniture and fixtures 5 years Leasehold improvements Shorter of useful life of asset or lease term | |
Summary of total shares outstanding | 2022 2021 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of RSUs 291,167 — Shares issuable upon exercise of stock options 176,142 265,102 Shares issuable upon exercise of PIPE Warrant (defined below) to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant (defined below) to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants (defined below) to purchase common stock 90,000 — | 2021 2020 Shares issuable upon conversion of preferred stock — 1,291,012 Shares issuable upon vesting of restricted stock units 282,417 — Shares issuable upon exercise of stock options 255,147 251,847 Shares issuable upon exercise of PIPE Warrant to purchase common stock 1,312,500 — Shares issuable upon exercise of Lender Warrant to purchase common stock 12,500 23,309 Shares issuable upon exercise of Underwriter Warrants to purchase common stock 90,000 — |
PROPERTY AND EQUIPMENT, NET (_2
PROPERTY AND EQUIPMENT, NET (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | ||
Summary of property and equipment, net | March 31, December 31, 2022 2021 (unaudited) Website $ 107,927 $ 107,927 Computer equipment and purchased software 84,588 84,588 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 340,083 Accumulated depreciation (312,014) (307,302) Total property and equipment, net $ 28,069 $ 32,781 | 2021 2020 Website $ 107,927 $ 105,376 Computer equipment and purchased software 84,588 84,589 Equipment 35,449 35,449 Furniture and fixtures 87,184 87,184 Leasehold improvements 24,935 24,935 Total property and equipment 340,083 337,533 Accumulated depreciation (307,302) (261,944) Total property and equipment, net $ 32,781 $ 75,589 |
DEBT (Tables)_2
DEBT (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
DEBT | ||
Schedule of conversion of amended bridge notes and convertible notes | Write off of derivative liability relating to the Convertible Notes $ 2,644,000 Extinguishment of Convertible Notes principal 5,486,199 Accrued and unpaid interest on the Convertible Notes 1,257,066 Accumulated amortization on debt issuance costs 33,035 Loss on extinguishment of Convertible Notes 260,185 Write off of debt issuance costs (27,573) Write off of derivative liability relating to the Bridge Notes 2,031,300 Extinguishment of Bridge Notes principal 4,000,000 Accrued and unpaid interest on the Bridge Notes 717,646 Gain on extinguishment of Bridge Notes (9,514) Total conversion of Convertible Notes and Bridge Notes into common stock $ 16,392,344 | |
Schedule of future minimum payments | 2022 (excluding 3 months ended March 31, 2022) $ — 2023 1,166,667 2024 1,400,000 2025 933,333 Total 3,500,000 Less debt issuance cost (74,336) Term Loan, net $ 3,425,664 | |
Schedule of future minimum payments | Year Ending December 31, Amount Due 2022 $ — 2023 1,166,667 2024 1,400,000 2025 933,333 Total 3,500,000 Less debt issuance cost (77,384) Long-term debt, net $ 3,422,616 |
COMMITMENTS AND CONTINGENCIES_4
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | ||
Schedule of Future lease payment - Undiscounted Cash Flows | 2022 (excluding three months ended March 31, 2022) $ 122,631 2023 165,254 2024 27,601 Total future minimum lease payments 315,486 Less effect of discounting (18,104) Present value of future minimum lease payments $ 297,382 | |
Schedule of Cash Flows informations | Non-cash operating lease expense (operating cash flow) $ 36,291 Change in operating lease liabilities (operating cash flow) $ (35,741) Supplemental non-cash amounts of operating lease liabilities arising from obtaining right-of-use assets $ 333,123 | |
Summary of monthly rental payments, presented by year | Year Ending December 31, Operating Leases 2022 $ 163,158 2023 165,254 2024 27,601 Total $ 356,013 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2022 2021 Assumptions: Risk-free interest rate — 0.47% – 0.64% Expected term (in years) — 5.81 – 5.85 Expected volatility — 49.88% –49.98% Expected dividend yield — — | |
Schedule of warrant activity | Weighted Average Weighted Remaining Warrants Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2021 1,415,000 $ 9.76 5.34 Granted — — — Exercised — — — Cancelled/forfeited — — — Balance at March 31, 2022 1,415,000 $ 9.76 5.22 | |
Warrants | ||
Class of Warrant or Right [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2022 2021 Assumptions: Risk-free interest rate — 0.90% - 1.30% Expected term (in years) — 5.00 10.00 Expected volatility — 59% - 69% Expected dividend yield — — | 2021 2020 Assumptions: Risk-free interest rate 0.90% - 1.30 % — % Expected term (in years) 5.00 - 10.00 — Expected volatility 59% - 69 % — % Expected dividend yield — % — % |
Schedule of warrant activity | Weighted Average Remaining Options Weighted Average Contractual Term Outstanding Exercise Price in Years Balance at December 31, 2019 — $ — — Granted 23,309 0.06 0.75 Exercised — — — Cancelled/forfeited — — — Balance at December 31, 2020 23,309 $ 0.06 0.75 Granted 1,415,000 12.77 5.34 Exercised (17,889) 0.06 — Cancelled/forfeited (5,420) 0.06 — Balance at December 31, 2021 1,415,000 $ 9.76 5.34 |
SHARE-BASED COMPENSATION (Tab_2
SHARE-BASED COMPENSATION (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2022 2021 Assumptions: Risk-free interest rate — 0.47% – 0.64% Expected term (in years) — 5.81 – 5.85 Expected volatility — 49.88% –49.98% Expected dividend yield — — | |
Schedule of summary of stock option activity | Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Granted — — — — Exercised (77,679) 1.04 — 336,632 Cancelled/forfeited (1,326) 1.00 — Balance at March 31, 2022 176,142 $ 1.18 8.01 $ 500,420 Options exercisable at March 31, 2022 135,786 $ 1.25 7.09 $ 559,850 | |
Schedule of share based compensation restricted stock units award activity | Weighted RSUs Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2021 285,542 $ 6.77 Granted 11,000 4.06 Vested (3,125) 6.28 Forfeited (2,250) 1.27 Unvested Balance at March 31, 2022 291,167 $ 6.68 | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Schedule of summary of compensation expense | 2022 Operating expenses: General and administrative $ 7,932 Sales and marketing 14,167 Fulfillment 13,631 Supply development 7,196 Technology 13,400 Total RSU expense $ 56,326 | 2021 Operating expenses: General and administrative $ 6,453 Fulfillment 21,824 Sales and marketing 25,686 Supply development 13,304 Technology 18,290 Total $ 85,557 |
Schedule of share based compensation restricted stock units award activity | Options Weighted Average Grant Outstanding Date Fair Value Unvested Balance at December 31, 2020 — $ — Granted 329,246 6.71 Vested (44,129) 6.33 Forfeited (2,700) 6.34 Unvested Balance at December 31, 2021 282,417 $ 6.78 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Summary of assumptions used to estimate the fair value of stock options granted using the Black-Scholes-Merton option pricing model | 2021 2020 Assumptions: Risk-free interest rate 0.47% – 0.66 % 0.30% – 1.41 % Expected term (in years) 5.81 – 5.89 5.32 – 6.14 Expected volatility 49.83% –49.98 % 43.11% – 50.14 % Expected dividend yield — % — % | |
Schedule of summary of stock option activity | Weighted Average Remaining Options Weighted Average Contractual Term Aggregate Outstanding Exercise Price in Years Intrinsic Value Balance at January 1, 2019 224,884 $ 1.08 8.78 $ — Granted 43,259 1.00 — — Exercised — 1.00 — — Cancelled/forfeited (16,296) 4.20 — — Balance at December 31, 2020 251,847 $ 1.00 8.06 $ 89,100 Granted 70,164 5.74 9.34 432,520 Exercised (55,694) 1.00 — 379,276 Cancelled/forfeited (11,170) 1.00 — — Balance at December 31, 2021 255,147 $ 2.32 7.75 $ 1,550,409 Options exercisable at December 31, 2021 179,711 $ 1.12 7.04 $ 1,219,964 | |
Schedule of summary of compensation expense | 2022 2021 Operating expenses: General and administrative $ 26,337 $ 9,104 Sales and marketing 1,075 1,950 Fulfillment 825 1,469 Supply development 306 288 Technology 1,012 9,225 Total stock options expense $ 29,555 $ 22,036 | 2021 2020 Operating expenses: General and administrative $ 257,005 $ 38,367 Sales and marketing 55,035 8,216 Fulfillment 41,482 6,193 Supply development 8,138 1,215 Technology 260,404 38,875 Total $ 622,064 $ 92,866 |
NATURE OF BUSINESS AND BASIS _2
NATURE OF BUSINESS AND BASIS OF PRESENTATION (Details) | Jun. 21, 2021USD ($) | Mar. 30, 2021 | Mar. 31, 2022segment | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) |
Nature of business | |||||
Bridge notes payable, net of debt issuance costs | $ 4,589,228 | ||||
Reporting units | segment | 1 | 1 | |||
Operating segments | segment | 1 | 1 | |||
Reverse stock split ratio | 0.18 | ||||
Outstanding principal of convertible notes, converted | $ 5,500,000 | $ 4,000,000 | |||
Payments on debt | 3,000,000 | ||||
Bridge Notes | |||||
Nature of business | |||||
Interest expense | 1,014,657 | $ 1,607,398 | |||
Outstanding principal of convertible notes, converted | 4,000,000 | ||||
Payments on debt | $ 3,000,000 |
NATURE OF BUSINESS AND BASIS _3
NATURE OF BUSINESS AND BASIS OF PRESENTATION - Public Offering (Details) - USD ($) | Jul. 01, 2021 | Jun. 21, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Aug. 01, 2021 | Dec. 31, 2020 |
Subsidiary, Sale of Stock [Line Items] | ||||||
Share price | $ 6.25 | |||||
Issuance of common stock in connection with public offering | $ 18,000,000 | |||||
Net proceeds from offering | $ 18,200,000 | |||||
Other offering costs | 2,339,816 | |||||
Accrued interest | $ 8,167 | 8,167 | $ 3,696,944 | |||
Working Capital Deficit | 28,104,041 | 30,442,955 | ||||
Payment of principal to bridge note holders | (3,000,000) | |||||
Accumulated deficit | 40,403,144 | 38,019,402 | 29,057,587 | |||
Convertible Notes outstanding | $ 0 | |||||
Number of shares issued upon conversion | 842,429 | |||||
Cash | 26,099,178 | $ 27,738,979 | $ 695,909 | |||
Accounts payable and accrued expenses | 1,321,468 | 1,842,481 | ||||
Purchase orders negatively impacted due to Russia's invasion of Ukraine | $ 1,000,000 | |||||
Convertible Notes | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of shares issued upon conversion | 1,206,614 | |||||
Loss on conversion of notes | 300,000 | |||||
Bridge Notes | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Payment of principal to bridge note holders | $ (3,000,000) | |||||
Number of shares issued upon conversion | 842,429 | |||||
Conversion price | $ 5.60 | $ 5.60 | ||||
Initial Public Offering | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Issuance of shares (in shares) | 2,250,000 | |||||
Share price | $ 8 | |||||
Issuance of common stock in connection with public offering | $ 18,000,000 | |||||
Net proceeds from offering | 15,700,000 | |||||
Other offering costs | $ 600,000 | |||||
Conversion of redeemable convertible preferred stock into common stock upon initial public offering (in shares) | 1,291,012 | |||||
Temporary equity, shares outstanding (in shares) | 0 | |||||
Underwriting Discounts | $ 1,900,000 | $ 1,700,000 | ||||
Accrued interest | $ 1,300,000 | |||||
Conversion price | $ 5.60 | |||||
Overallotment | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Issuance of shares (in shares) | 337,500 | |||||
Share price | $ 8 | |||||
Issuance of common stock in connection with public offering | $ 2,700,000 | |||||
Underwriting Discounts | $ 1,900,000 | |||||
Accrued interest | $ 700,000 |
SUMMARY OF SIGNIFICANT ACCOU_15
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |
Dec. 31, 2021customer | Dec. 31, 2020 | |
Revenue | Customer concentration | ||
Concentration Risk [Line Items] | ||
Number of Customers | 0 | 2 |
Revenue | Customer concentration | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | |
Revenue | Customer concentration | Customer Two | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 10.00% | |
Revenue | Geographic concentration | Foreign customers | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 7.00% | 6.00% |
Account receivable | Customer concentration | ||
Concentration Risk [Line Items] | ||
Number of Customers | 1 | 1 |
Account receivable | Customer concentration | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | 10.00% |
Account receivable | Geographic concentration | Foreign customers | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 6.00% | 11.00% |
Accounts receivable-unbilled | Customer concentration | ||
Concentration Risk [Line Items] | ||
Number of Customers | 2 | 3 |
Accounts receivable-unbilled | Customer concentration | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 23.00% | 23.00% |
Accounts receivable-unbilled | Customer concentration | Customer Two | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 17.00% | 13.00% |
Accounts receivable-unbilled | Customer concentration | Customer Three | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | |
Accounts receivable-unbilled | Geographic concentration | Foreign customers | ||
Concentration Risk [Line Items] | ||
Concentration risk (as a percent) | 11.00% | 0.00% |
SUMMARY OF SIGNIFICANT ACCOU_16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition and Accounts Receivable (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Right of return (in days) | 14 days | 14 days | ||
Revenue | $ 2,518,660 | $ 2,963,807 | $ 11,135,303 | $ 8,184,106 |
Accounts receivable | ||||
Allowance for doubtful accounts | 184,837 | 269,170 | 108,096 | |
Specimens | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,372,386 | 2,947,295 | 10,944,255 | 8,086,324 |
Shipping and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 146,274 | $ 16,512 | $ 191,048 | $ 97,782 |
SUMMARY OF SIGNIFICANT ACCOU_17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Internally Developed Software, net (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Internal-use software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (in years) | 5 years | 5 years |
SUMMARY OF SIGNIFICANT ACCOU_18
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional information (Details) - USD ($) | Jun. 21, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||
Impairment charges | $ 0 | $ 0 | $ 0 | $ 0 | |
Amortized debt issuance costs | 875,293 | 9,185 | |||
Research and development costs | 295,305 | 319,235 | |||
Advertising Expense | 229,223 | 111,304 | |||
Deferred Costs | |||||
Deferred Offering Costs | $ 2,300,000 | $ 0 | $ 265,000 | ||
Deferred initial public offering costs | $ 600,000 |
SUMMARY OF SIGNIFICANT ACCOU_19
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share Based Compensation (Details) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, fair value (per share) | $ 3.83 | $ 3.83 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, fair value (per share) | 0.39 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, fair value (per share) | $ 3.83 |
SUMMARY OF SIGNIFICANT ACCOU_20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Shares issuable upon conversion of preferred stock (Details) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issuable upon conversion of preferred stock | 1,291,012 | 1,291,012 | ||
Shares Issuable Upon Vesting Of RSUs | 291,167 | 282,417 | ||
Shares issuable upon exercise of stock options | 176,142 | 265,102 | 255,147 | 251,847 |
Shares issuable upon exercise of warrants | 1,312,500 | 1,312,500 | ||
Lender | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issuable upon exercise of Warrant to purchase common stock | 12,500 | 23,309 | 12,500 | 23,309 |
Underwriter Warrants | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Shares issuable upon exercise of Warrant to purchase common stock | 90,000 | 90,000 |
SUMMARY OF SIGNIFICANT ACCOU_21
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accounting Standard Recently Adopted (Details) | Mar. 31, 2022USD ($) |
Operating lease right-of-use asset | $ 296,832 |
Operating lease long-term obligation | 147,375 |
Accounting Standards Update 2016-02 [Member] | |
Operating lease right-of-use asset | 333,000 |
Operating lease long-term obligation | $ 333,000 |
PROPERTY AND EQUIPMENT, NET (_3
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
PP&E, Net, by Type | ||||
Total property and equipment | $ 340,083 | $ 340,083 | $ 337,533 | |
Accumulated depreciation | (312,014) | (307,302) | (261,944) | |
Total property and equipment, net | 28,069 | 32,781 | 75,589 | |
Depreciation of property and equipment | 4,712 | $ 11,130 | 45,358 | 44,758 |
Website | ||||
PP&E, Net, by Type | ||||
Total property and equipment | 107,927 | 107,927 | 105,376 | |
Computer equipment and purchased software | ||||
PP&E, Net, by Type | ||||
Total property and equipment | 84,588 | 84,588 | 84,589 | |
Equipment | ||||
PP&E, Net, by Type | ||||
Total property and equipment | 35,449 | 35,449 | 35,449 | |
Furniture and fixtures | ||||
PP&E, Net, by Type | ||||
Total property and equipment | 87,184 | 87,184 | 87,184 | |
Leasehold improvements | ||||
PP&E, Net, by Type | ||||
Total property and equipment | $ 24,935 | $ 24,935 | $ 24,935 |
INTERNALLY DEVELOPED SOFTWARE_4
INTERNALLY DEVELOPED SOFTWARE, NET (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
INTERNALLY DEVELOPED SOFTWARE, NET | ||||
Internally developed software capitalized | $ 339,162 | $ 214,534 | $ 1,035,367 | $ 1,102,186 |
Amortization expense | $ 266,219 | $ 235,229 | 958,639 | 774,929 |
Accumulated amortization | $ 3,833,904 | $ 2,875,264 |
DEBT - Term Loan (Details)_2
DEBT - Term Loan (Details) - USD ($) | Mar. 10, 2023 | Aug. 13, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 |
Debt Instrument [Line Items] | |||||||
Proceeds from term loan | $ 3,500,000 | $ 783,008 | |||||
Long-term debt, net | $ 3,425,664 | 3,422,616 | |||||
Outstanding principal loan amount | 3,500,000 | 3,500,000 | |||||
Interest expense | 38,048 | $ 853,147 | 2,102,681 | 2,096,795 | |||
Debt issuance costs | $ 74,336 | 77,384 | |||||
Issuance of common stock warrants in connection with Term Loan | 49,072 | ||||||
Payment of debt issuance costs in connection with note payable | 32,917 | ||||||
Amortized debt issuance costs | $ 875,293 | 9,185 | |||||
Prime Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread rate | 0.75% | 0.75% | |||||
Interest rate on the loan | 3.25% | 3.25% | |||||
Lender | |||||||
Debt Instrument [Line Items] | |||||||
Debt issuance costs | $ 81,989 | $ 81,989 | |||||
Warrants to purchase common stock issued | 12,500 | 12,500 | |||||
Issuance of common stock warrants in connection with Term Loan | $ 49,072 | $ 49,072 | |||||
Payment of debt issuance costs in connection with note payable | 23,066 | 23,066 | |||||
Legal costs | 9,851 | $ 9,851 | |||||
Term Loan | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from term loan | $ 3,500,000 | ||||||
Unused borrowing amount | $ 1,500,000 | $ 1,500,000 | |||||
Interest rate on the loan | 4.00% | 4.00% | |||||
Calendar day to pay interest | 10 days | ||||||
Calendar day to pay principal | 30 days | ||||||
Outstanding principal loan amount | $ 3,500,000 | ||||||
Interest expense | 35,000 | $ 47,444 | 0 | ||||
Amortized debt issuance costs | 3,048 | 5,175 | 0 | ||||
Unamortized debt issuance costs | $ 74,336 | $ 77,384 | $ 0 |
DEBT - Future Minimum Payment_2
DEBT - Future Minimum Payments (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
2023 | $ 1,166,667 | |
2024 | 1,400,000 | $ 1,166,667 |
2025 | 933,333 | 1,400,000 |
2025 | 933,333 | |
Total | 3,500,000 | 3,500,000 |
Less debt issuance cost | (74,336) | (77,384) |
Long-term debt, net | 3,425,664 | $ 3,422,616 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total | $ 3,500,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Lease costs related to operating lease (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)item | Jan. 01, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 1 year 11 months 1 day | |
Office Space in Lexington, Massachusetts [Member] | ||
Lessee, Lease, Description [Line Items] | ||
Number of operating lease | 1 | |
Incremental borrowing rate | 5.96% | |
Sublease rental income | $ | $ 0 | |
Number of related party lease agreements | 0 |
COMMITMENTS AND CONTINGENCIES_5
COMMITMENTS AND CONTINGENCIES - Future lease payments (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Leases | ||||
2022 (excluding three months ended March 2022) | $ 122,631 | |||
2023 | 165,254 | $ 163,158 | ||
2024 | 27,601 | 165,254 | ||
Total future minimum lease payments | 315,486 | 356,013 | ||
Less effect of discounting | (18,104) | |||
Present value of future minimum lease payments | 297,382 | |||
2024 | 27,601 | |||
Rent expense | $ 44,957 | $ 40,178 | $ 167,167 | $ 136,281 |
COMMITMENTS AND CONTINGENCIES_6
COMMITMENTS AND CONTINGENCIES - Cash Flows - Operating lease (Details) | 3 Months Ended |
Mar. 31, 2022USD ($) | |
COMMITMENTS AND CONTINGENCIES | |
Non-cash lease expense (operating cash flow) | $ 36,291 |
Change in lease liabilities (operating cash flow) | (35,741) |
Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets | $ 333,123 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
STOCKHOLDERS' EQUITY | |||
Number of shares authorized | 250,000,000 | 250,000,000 | |
Common stock, shares authorized | 200,000,000 | 200,000,000 | 16,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
STOCKHOLDERS' EQUITY - Common S
STOCKHOLDERS' EQUITY - Common Stock - (Details) - USD ($) | Aug. 01, 2021 | Jul. 01, 2021 | Jun. 21, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Class of Stock [Line Items] | |||||
Net proceeds from issuance of shares | $ 18,000,000 | ||||
Number of shares issued upon conversion | 842,429 | ||||
Net proceeds from offering | $ 18,200,000 | ||||
Share price | $ 6.25 | ||||
Equity issuance costs | $ 2,339,816 | ||||
Issuance of common stock in connection with public offering | 18,000,000 | ||||
Issuance of common stock through exercise of stock options (in shares) | 77,679 | ||||
Issuance of common stock through exercise of stock options | $ 75,277 | 58,648 | |||
Shares issued in exchange for investor relation services (in shares) | 2,000 | ||||
Shares issued in exchange for investor relation services | $ 12,500 | $ 12,500 | |||
Overallotment | |||||
Class of Stock [Line Items] | |||||
Net proceeds from issuance of shares | $ 2,500,000 | ||||
Issuance of shares (in shares) | 337,500 | ||||
Underwriting Discounts | $ 1,900,000 | ||||
Underwriting discounts | $ 200,000 | ||||
Share price | $ 8 | ||||
Issuance of common stock in connection with public offering | $ 2,700,000 | ||||
Initial Public Offering | |||||
Class of Stock [Line Items] | |||||
Issuance of shares (in shares) | 2,250,000 | ||||
Underwriting Discounts | $ 1,900,000 | $ 1,700,000 | |||
Net proceeds from offering | $ 15,700,000 | ||||
Share price | $ 8 | ||||
Equity issuance costs | $ 600,000 | ||||
Issuance of common stock in connection with public offering | $ 18,000,000 | ||||
Bridge Notes | |||||
Class of Stock [Line Items] | |||||
Number of shares issued upon conversion | 842,429 | ||||
Bridge Notes | Initial Public Offering | |||||
Class of Stock [Line Items] | |||||
Outstanding principal and accrued interest converted | $ 4,700,000 | ||||
Convertible Notes. | Initial Public Offering | |||||
Class of Stock [Line Items] | |||||
Number of shares issued upon conversion | 842,429 |
STOCKHOLDERS' EQUITY - Underwri
STOCKHOLDERS' EQUITY - Underwriter Warrants (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2023 | Dec. 31, 2020 | |
Class of Warrant or Right [Line Items] | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Warrants exercisable term | 9 years 7 months 13 days | |||
Equity issuance costs | $ 2,339,816 | |||
Underwriter Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants to purchase shares of common stock | 90,000 | 90,000 | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||
Exercise price of warrant | $ 0.64 | $ 10 | $ 10 | |
Warrants exercisable term | 4 years 2 months 15 days | 4 years 6 months | ||
Commencing term from effective date of registration statement | 180 days | 180 days | ||
Equity issuance costs | $ 400,000 | $ 400,000 |
STOCKHOLDERS' EQUITY - Warrants
STOCKHOLDERS' EQUITY - Warrants (Details) - USD ($) | Aug. 13, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Dec. 01, 2021 |
Class of Warrant or Right [Line Items] | ||||
Warrants exercisable term | 9 years 7 months 13 days | |||
Issuance of common stock through exercise of warrants | $ 992 | |||
Private Placement | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants exercisable term | 4 years 10 months 13 days | 5 years 6 months | ||
Warrants to purchase shares of common stock | 1,312,500 | |||
Exercise price of warrant | $ 12.06 | $ 13 | ||
Warrants other than Underwriter Warrants | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants exercisable term | 9 years 4 months 17 days | |||
Warrants to purchase shares of common stock | 12,500 | 17,889 | ||
Exercise price of warrant | $ 8 | $ 12.06 | ||
Issuance of common stock through exercise of warrants (in shares) | 17,889 | |||
Issuance of common stock through exercise of warrants | $ 992 | |||
Warrant to purchase common stock shares issued | 12,500 |
STOCKHOLDERS' EQUITY - Estimate
STOCKHOLDERS' EQUITY - Estimate the fair value of warrants granted (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, minimum | 0.47% | 0.47% | 0.30% |
Risk-free interest rate, maximum | 0.64% | 0.66% | 1.41% |
Expected volatility, minimum | 49.88% | 49.83% | 43.11% |
Expected volatility, maximum | 49.98% | 49.98% | 50.14% |
Minimum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Expected term (in years) | 5 years 9 months 21 days | 5 years 9 months 21 days | 5 years 3 months 25 days |
Maximum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Expected term (in years) | 5 years 10 months 6 days | 5 years 10 months 20 days | 6 years 1 month 20 days |
Warrants | |||
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, minimum | 0.90% | ||
Risk-free interest rate, maximum | 1.30% | ||
Expected volatility, minimum | 59.00% | ||
Expected volatility, maximum | 69.00% | ||
Warrants | Minimum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, minimum | 0.90% | ||
Expected term (in years) | 5 years | 5 years | |
Expected volatility, minimum | 59.00% | ||
Warrants | Maximum | |||
Assumptions used to estimate the fair value of stock options granted | |||
Risk-free interest rate, maximum | 1.30% | ||
Expected term (in years) | 10 years | 10 years | |
Expected volatility, maximum | 69.00% |
STOCKHOLDERS' EQUITY - Warrant
STOCKHOLDERS' EQUITY - Warrant activity (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options Outstanding. | ||||
Balance at the beginning | 255,147 | 251,847 | 251,847 | |
Exercised | (77,679) | |||
Balance at the end | 176,142 | 265,102 | 255,147 | 251,847 |
Warrants | ||||
Options Outstanding. | ||||
Balance at the beginning | 1,415,000 | 23,309 | 23,309 | |
Granted | 1,415,000 | 23,309 | ||
Exercised | (17,889) | |||
Cancelled/forfeited | (5,420) | |||
Balance at the end | 1,415,000 | 1,415,000 | 23,309 | |
Weighted Average Exercise Price | ||||
Balance at the beginning (in dollars per share) | $ 9.76 | $ 0.06 | $ 0.06 | |
Granted (in dollars per share) | 12.77 | $ 0.06 | ||
Exercised (in dollars per share) | 0.06 | |||
Cancelled/forfeited (in dollars per share) | 0.06 | |||
Balance at the end (in dollars per share) | $ 9.76 | $ 9.76 | $ 0.06 | |
Weighted Average Remaining Contractual Term (in years) | ||||
Weighted Average Remaining Contractual Term (in years) | 5 years 2 months 19 days | 5 years 4 months 2 days | 9 months | |
Granted (in years) | 5 years 4 months 2 days | 9 months |
SHARE-BASED COMPENSATION - Es_2
SHARE-BASED COMPENSATION - Estimate the fair value of stock options (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Assumptions used to estimate the fair value of stock options granted | ||||
Risk-free interest rate, minimum | 0.47% | 0.47% | 0.30% | |
Risk-free interest rate, maximum | 0.64% | 0.66% | 1.41% | |
Expected volatility, minimum | 49.88% | 49.83% | 43.11% | |
Expected volatility, maximum | 49.98% | 49.98% | 50.14% | |
Expected dividend yield | 0.00% | 0.00% | ||
Minimum | ||||
Assumptions used to estimate the fair value of stock options granted | ||||
Expected term (in years) | 5 years 9 months 21 days | 5 years 9 months 21 days | 5 years 3 months 25 days | |
Maximum | ||||
Assumptions used to estimate the fair value of stock options granted | ||||
Expected term (in years) | 5 years 10 months 6 days | 5 years 10 months 20 days | 6 years 1 month 20 days |
SHARE-BASED COMPENSATION - St_2
SHARE-BASED COMPENSATION - Stock option activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Options Outstanding | |||||
Balance at the beginning | 255,147 | 251,847 | 251,847 | ||
Exercised | (77,679) | ||||
Balance at the end | 176,142 | 265,102 | 255,147 | 251,847 | |
2013 and 2021 Stock Incentive Plan | |||||
Options Outstanding | |||||
Balance at the beginning | 255,147 | 251,847 | 251,847 | 224,884 | |
Granted | 70,164 | 43,259 | |||
Exercised | (77,679) | (55,694) | |||
Cancelled/forfeited | (1,326) | (11,170) | (16,296) | ||
Balance at the end | 176,142 | 255,147 | 251,847 | 224,884 | |
Options exercisable at the end | 135,786 | 179,711 | |||
Weighted Average Exercise Price | |||||
Balance at the beginning (in dollars per share) | $ 2.32 | $ 1 | $ 1 | $ 1.08 | |
Granted (in dollars per share) | 5.74 | 1 | |||
Exercised (in dollars per share) | 1.04 | $ 0 | 1 | 1 | |
Cancelled/forfeited (in dollars per share) | 1 | 1 | 4.20 | ||
Balance at the end (in dollars per share) | 1.18 | 2.32 | $ 1 | $ 1.08 | |
Options exercisable at the end (in dollars per share) | $ 1.25 | $ 1.12 | |||
Weighted Average Remaining Contractual Term (in years) | |||||
Weighted Average Remaining Contractual Term (in years) | 8 years 3 days | 7 years 9 months | 8 years 21 days | 8 years 9 months 10 days | |
Granted (in years) | 9 years 4 months 2 days | ||||
Options exercisable at the end (in years) | 7 years 1 month 2 days | 7 years 14 days | |||
Share Based Compensation Arrangement By Share Based Payment Award Options Aggregate Intrinsic Value | |||||
Balance at the beginning (in dollars) | $ 1,550,409 | $ 89,100 | $ 89,100 | ||
Granted (in dollars) | 432,520 | ||||
Exercised (in dollars) | 336,632 | (379,276) | |||
Balance at the end (in dollars) | 500,420 | 1,550,409 | $ 89,100 | ||
Options exercisable at the end (in dollars) | $ 559,850 | $ 1,219,964 |
SHARE-BASED COMPENSATION - Ou_2
SHARE-BASED COMPENSATION - Outstanding principal and all unpaid and accrued interest (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total intrinsic value of stock options exercised | $ 379,276 | $ 0 | |||
Weighted-average grant date fair value | $ 0 | $ 1.77 | $ 3.94 | $ 0.55 | |
Unamortized compensation expense | $ 212,195 | $ 432,520 | |||
Unamortized compensation expense recognized over the remaining requisite service period | 2 years 1 month 6 days | 2 years 4 months 24 days | |||
Proceeds from exercise of stock options | $ 75,277 | $ 58,648 | $ 0 | ||
Performance Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 0 | 0 | |||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 56,326 | $ 85,557 | |||
Unamortized compensation expense recognized over the remaining requisite service period | 3 years 4 months 24 days | 3 years 6 months 7 days | |||
Executive Officer and immediate family | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unamortized compensation expense recognized over the remaining requisite service period | 3 years 5 months 19 days | 3 years 2 months 23 days | |||
Director [Member] | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 19,356 | ||||
Unamortized compensation expense recognized over the remaining requisite service period | 6 months | 3 months |
SHARE-BASED COMPENSATION - 2021
SHARE-BASED COMPENSATION - 2021 Stock Incentive Plan - shares (Details) - shares | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 16, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options authorized | 608,000 | |||
Sharebased compensation, shares issued | 11,000 | |||
Performance Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Sharebased compensation, shares issued | 47,349 | 47,349 | ||
2013 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common Stock, Capital Shares Reserved for Future Issuance | 112,206 | 226,164 | ||
2021 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options authorized | 608,000 | |||
Sharebased compensation, shares issued | 381,836 | |||
Common Stock, Capital Shares Reserved for Future Issuance | 217,414 | 105,845 |
SHARE-BASED COMPENSATION - Ad_2
SHARE-BASED COMPENSATION - Additional Information (Details) - Performance Stock Units - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Jul. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Compensation expense | $ 0 | $ 0 | |
Vesting period | 4 years |
SHARE-BASED COMPENSATION - Co_2
SHARE-BASED COMPENSATION - Compensation Expense (Details) - Stock Options - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | $ 29,555 | $ 22,036 | $ 622,064 | $ 92,866 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 26,337 | 9,104 | 257,005 | 38,367 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 1,075 | 1,950 | 55,035 | 8,216 |
Fulfillment | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 825 | 1,469 | 41,482 | 6,193 |
Supply development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | 306 | 288 | 8,138 | 1,215 |
Technology | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Allocated share based compensation expense | $ 1,012 | $ 9,225 | $ 260,404 | $ 38,875 |
SHARE-BASED COMPENSATION - Re_2
SHARE-BASED COMPENSATION - Restricted Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jul. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 2 years 1 month 6 days | 2 years 4 months 24 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 189,396 | 11,000 | 0 | ||
Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 56,326 | $ 85,557 | |||
Awards vesting rights percentage | 25.00% | ||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 835,347 | $ 845,933 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 4 months 24 days | 3 years 6 months 7 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | ||||
Restricted Stock Units | Executive Officer and immediate family | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Awards vesting rights percentage | 20.00% | ||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 806,216 | $ 727,261 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 3 years 5 months 19 days | 3 years 2 months 23 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 189,396 | ||||
Restricted Stock Units | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 19,356 | ||||
Vesting period | 1 year | ||||
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount | $ 45,379 | $ 26,023 | |||
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 6 months | 3 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 12,500 | ||||
Restricted Stock Units | Share-based Payment Arrangement, Tranche One [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | 1 year | |||
Awards vesting rights percentage | 25.00% | ||||
Restricted Stock Units | Share-based Payment Arrangement, Tranche Two [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | 3 years | |||
General and administrative | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 7,932 | $ 6,453 | |||
General and administrative | Restricted Stock Units | Executive Officer and immediate family | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 394,555 | 78,955 | |||
General and administrative | Restricted Stock Units | Director [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 33,121 | ||||
Fulfillment | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 13,631 | 21,824 | |||
Sales and marketing | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 14,167 | 25,686 | |||
Supply development | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | 7,196 | 13,304 | |||
Technology | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Compensation expense | $ 13,400 | $ 18,290 | |||
Share-based Payment Arrangement, Employee [Member] | Restricted Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 127,350 |
SHARE-BASED COMPENSATION - Un_2
SHARE-BASED COMPENSATION - Unvested Restricted Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options outstanding | ||||
Unvested Balance at December 31, 2021 | 285,542 | 329,246 | ||
Granted | 189,396 | 11,000 | 0 | |
Vested | $ (3,125) | $ (44,129) | ||
Forfeited | (2,250) | (2,700) | ||
Unvested Balance at March 31, 2022 | 291,167 | 285,542 | 329,246 | |
Weighted Average Grant Date Fair Value | ||||
Unvested Balance at December 31, 2021 | $ 6.78 | $ 6.71 | ||
Granted | 4.06 | 6.33 | ||
Vested | 6.28 | 6.34 | ||
Forfeited | 1.27 | 6.78 | ||
Unvested Balance at March 31, 2022 | $ 6.68 | $ 6.78 | $ 6.71 |
INCOME TAXES (Details)_2
INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $ 900,000 | ||
Provision for income taxes | 0 | $ 0 | |
Tax Credit Carryforward, Amount | 850,000 | 179,000 | $ 900,000 |
Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 30,300,000 | 32,500,000 | |
Net operating loss carryforwards, subject to expiration | 13,000,000 | 13,000,000 | |
Net operating loss carryforwards, carried forward indefinitely | 17,300,000 | 19,500,000 | |
Tax Credit Carryforward, Amount | $ 850,000 | ||
State | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 22,400,000 | $ 23,400,000 |
SUBSEQUENT EVENTS - (Details)
SUBSEQUENT EVENTS - (Details) - shares | 1 Months Ended | 3 Months Ended |
Apr. 30, 2022 | Mar. 31, 2022 | |
Restricted Stock Units | ||
Subsequent Event [Line Items] | ||
Awards vesting rights percentage | 25.00% | |
2021 Stock Incentive Plan | Subsequent event | ||
Subsequent Event [Line Items] | ||
Awards vesting rights percentage | 25.00% | |
2021 Stock Incentive Plan | Subsequent event | Restricted Stock Units | ||
Subsequent Event [Line Items] | ||
Granted | 107,326 |