Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 14, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | Nxt-ID, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 53,311,898 | |
Amendment Flag | false | |
Entity Central Index Key | 0001566826 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-36616 | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash | $ 8,515,824 | $ 4,387,416 |
Restricted cash | 150,130 | 150,130 |
Accounts receivable, net | 67,674 | 133,719 |
Inventory, net | 780,479 | 767,351 |
Prepaid expenses and other current assets | 536,268 | 455,553 |
Total Current Assets | 10,050,375 | 5,894,169 |
Property and equipment: | ||
Equipment | 183,044 | 183,044 |
Furniture and fixtures | 98,839 | 98,839 |
Tooling and molds | 644,462 | 644,462 |
Property and equipment, gross | 926,345 | 926,345 |
Accumulated depreciation | (913,149) | (897,137) |
Property and equipment, net | 13,196 | 29,208 |
Right-of-use assets | 292,797 | 306,786 |
Goodwill | 15,479,662 | 15,479,662 |
Other intangible assets, net of amortization of $3,553,950 and $3,366,105, respectively | 5,050,617 | 5,238,462 |
Total Assets | 30,886,647 | 26,948,287 |
Current Liabilities | ||
Accounts payable | 2,305,317 | 2,748,814 |
Accrued expenses | 1,717,711 | 1,315,262 |
Short-term debt | 45,000 | 346,390 |
Term loan facility - current | 2,062,500 | 2,062,500 |
Total Current Liabilities | 6,130,528 | 6,472,966 |
Term loan facility, net of debt discount of $60,055 and $137,855, respectively, and deferred debt issuance costs of $310,665 and $713,119, respectively | 3,147,032 | 8,182,403 |
Other long-term liabilities | 1,311,209 | 1,326,409 |
Total Liabilities | 10,588,769 | 15,981,778 |
Commitments and Contingencies | ||
Series C Preferred Stock | ||
Series C Preferred Stock, par value $0.0001 per share: 2,000 shares designated; 2,000 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 1,807,300 | 1,807,300 |
Stockholders’ Equity | ||
Preferred stock, value | ||
Common Stock, par value $0.0001 per share: 100,000,000 shares authorized; 53,311,898 and 40,619,974 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 5,331 | 4,062 |
Additional paid-in capital | 89,616,202 | 74,583,144 |
Accumulated deficit | (71,130,955) | (65,427,997) |
Total Stockholders’ Equity | 18,490,578 | 9,159,209 |
Total Liabilities, Series C Preferred Stock and Stockholders’ Equity | 30,886,647 | 26,948,287 |
Series A Preferred Stock | ||
Stockholders’ Equity | ||
Preferred stock, value | ||
Series B Preferred Stock | ||
Stockholders’ Equity | ||
Preferred stock, value | ||
Series D Preferred Stock | ||
Stockholders’ Equity | ||
Preferred stock, value | ||
Seried E Preferred Stock | ||
Stockholders’ Equity | ||
Preferred stock, value |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Other intangible assets, net of amortization (in Dollars) | $ 3,553,950 | $ 3,366,105 |
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 10,000,000 | 10,000,000 |
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 53,311,898 | 40,619,974 |
Common stock, shares outstanding | 53,311,898 | 40,619,974 |
Term Loan Facility | ||
Net of debt discount (in Dollars) | $ 60,055 | $ 137,855 |
Deferred debt issuance costs (in Dollars) | $ 310,665 | $ 713,119 |
Series C Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 2,000 | 2,000 |
Preferred stock, shares issued | 2,000 | 2,000 |
Preferred stock, shares outstanding | 2,000 | 2,000 |
Series A Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 3,125,000 | 3,125,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series B Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 4,500,000 | 4,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Series D Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 1,515,151 | 1,515,151 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Seried E Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares designated | 1,476,016 | 1,476,016 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 2,438,682 | $ 3,744,029 |
Cost of goods sold | 888,093 | 948,124 |
Gross Profit | 1,550,589 | 2,795,905 |
Operating Expenses | ||
General and administrative | 1,498,123 | 844,206 |
Selling and marketing | 560,441 | 725,681 |
Research and development | 274,915 | 186,612 |
Total Operating Expenses | 2,333,479 | 1,756,499 |
Operating (Loss) Income | (782,890) | 1,039,406 |
Other Income and (Expense) | ||
Interest expense | (861,248) | (601,342) |
Warrant modification expense | (2,881,729) | |
Forgiveness of PPP loan and accrued interest | 303,710 | |
Total Other Expense, Net | (3,439,267) | (601,342) |
(Loss) Income before Income Taxes | (4,222,157) | 438,064 |
Provision for Income Taxes | ||
Net (Loss) Income | (4,222,157) | 438,064 |
Preferred stock dividends, including deemed dividend on redeemable Series E convertible preferred stock | (1,555,801) | (25,000) |
Net (Loss) Income applicable to Common Stockholders | $ (5,777,958) | $ 413,064 |
Net (Loss) Income Per Share – Basic and Diluted (in Dollars per share) | $ (0.12) | $ 0.01 |
Weighted Average Number of Common Shares Outstanding – Basic and Diluted (in Shares) | 48,192,546 | 30,153,203 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes in Equity (Unaudited) - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 3,005 | $ 68,515,674 | $ (61,804,091) | $ 6,714,588 | |
Balance (in Shares) at Dec. 31, 2019 | 30,048,854 | ||||
Issuance of stock options for services | 40,000 | 40,000 | |||
Shares issued in connection with the management incentive plan for 2017 and 2018 | $ 28 | 116,600 | 116,628 | ||
Shares issued in connection with the management incentive plan for 2017 and 2018 (in Shares) | 279,287 | ||||
Net income (loss) | 438,064 | 438,064 | |||
Preferred stock dividends | (25,000) | (25,000) | |||
Balance at Mar. 31, 2020 | $ 3,033 | 68,647,274 | (61,366,027) | 7,284,280 | |
Balance (in Shares) at Mar. 31, 2020 | 30,328,141 | ||||
Balance at Dec. 31, 2019 | $ 3,005 | 68,515,674 | (61,804,091) | 6,714,588 | |
Balance (in Shares) at Dec. 31, 2019 | 30,048,854 | ||||
Balance at Dec. 31, 2020 | $ 4,062 | 74,583,144 | (65,427,997) | 9,159,209 | |
Balance (in Shares) at Dec. 31, 2020 | 40,619,974 | ||||
Issuance of stock options for services | 40,000 | 40,000 | |||
Issuance of Series E preferred stock, net | $ 4,000,003 | 4,000,003 | |||
Issuance of Series E preferred stock, net (in Shares) | 1,476,016 | ||||
Conversion of Series E preferred stock to common stock | $ (4,000,003) | $ 295 | 3,999,708 | ||
Conversion of Series E preferred stock to common stock (in Shares) | (1,476,016) | 2,952,032 | |||
Deemed dividend related to beneficial conversion feature of Series E preferred stock | 1,480,801 | (1,480,801) | |||
Exercise of common stock purchase warrants for cash | $ 537 | 6,669,957 | 6,670,494 | ||
Exercise of common stock purchase warrants for cash (in Shares) | 5,367,737 | ||||
Exercise of common stock purchase warrants on a cashless basis | $ 424 | (424) | |||
Exercise of common stock purchase warrants on a cashless basis (in Shares) | 4,239,329 | ||||
Warrant modification expense recorded in connection with the issuance of replacement warrants | 2,881,729 | 2,881,729 | |||
Shares issued in connection with the management incentive plans for 2018 and 2019 | $ 13 | 80,443 | 80,456 | ||
Shares issued in connection with the management incentive plans for 2018 and 2019 (in Shares) | 132,826 | ||||
Fees incurred in connection with equity warrants | (44,156) | (44,156) | |||
Net income (loss) | (4,222,157) | (4,222,157) | |||
Preferred stock dividends | (75,000) | (75,000) | |||
Balance at Mar. 31, 2021 | $ 5,331 | $ 89,616,202 | $ (71,130,955) | $ 18,490,578 | |
Balance (in Shares) at Mar. 31, 2021 | 53,311,898 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows from Operating Activities | ||
Net (Loss) Income | $ (4,222,157) | $ 438,064 |
Adjustments to reconcile net (loss) income to net cash used in operating activities of continuing operations: | ||
Depreciation | 16,012 | 16,898 |
Stock based compensation | 40,000 | 40,000 |
Amortization of debt discount | 77,800 | 28,672 |
Amortization of intangible assets | 187,845 | 187,845 |
Amortization of deferred debt issuance costs | 402,454 | 148,317 |
Non-cash charge for modification of warrant terms | 2,881,729 | |
Forgiveness of PPP loan and accrued interest | (303,710) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 66,045 | 2,563 |
Inventory | (13,128) | 353,496 |
Prepaid expenses and other current assets | (80,715) | (96,792) |
Accounts payable | (518,601) | (402,711) |
Accrued expenses | 463,660 | (199,092) |
Total Adjustments | 3,219,391 | 79,196 |
Net Cash (Used in) Provided by Operating Activities | (1,002,766) | 517,260 |
Net Cash Used in Investing Activities | ||
Cash Flows from Financing Activities | ||
Term loan repayment | (5,515,625) | (665,625) |
Proceeds received in connection with issuance of Series E preferred stock, net | 4,000,003 | |
Proceeds from exercise of common stock warrants | 6,670,494 | |
Payment of closing related fees | (23,698) | |
Net Cash Provided by (Used in) Financing Activities | 5,131,174 | (665,625) |
Net Increase (Decrease) in Cash and Restricted Cash | 4,128,408 | (148,365) |
Cash and Restricted Cash – Beginning of Period | 4,537,546 | 1,737,380 |
Cash and Restricted Cash – End of Period | 8,665,954 | 1,589,015 |
Cash paid during the periods for: | ||
Interest | 443,975 | 431,804 |
Taxes | 25,999 | 16,351 |
Non-cash financing activities: | ||
Accrued fees incurred in connection with equity offerings | 20,458 | |
Common Stock issued in connection with management incentive plans | 80,456 | 116,628 |
Issuance of common stock in connection with conversion of Series E preferred stock | 4,000,003 | |
Accrued Series C Preferred Stock dividends | $ 75,000 | $ 25,000 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | Note 1 – Organization and Basis of Presentation Organization and Principal Business Activities Nxt-ID, Inc. (“Nxt-ID” or the “Company”) was incorporated in the State of Delaware on February 8, 2012. The Company provides technology products and services for healthcare applications. The Company evaluates the performance of its business on, among other things, profit and loss from operations. The Company has extensive experience in access control, biometric and behavior-metric identity verification, security and privacy, encryption and data protection, payments, miniaturization, sensor technologies, and healthcare applications. The Company’s wholly-owned subsidiary, LogicMark LLC (“LogicMark”), manufactures and distributes non-monitored and monitored personal emergency response systems sold through the United States Department of Veterans Affairs, healthcare durable medical equipment dealers and distributors and monitored security dealers and distributors. Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of March 31, 2021, and for the three months ended March 31, 2021 and 2020 have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC and on the same basis as the Company prepares its annual audited consolidated financial statements. The unaudited condensed consolidated balance sheet as of March 31, 2021 and the condensed consolidated statements of operations, changes in equity and cash flows for the three months ended March 31, 2021 and March 31, 2020 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, or for any future interim period. The condensed consolidated balance sheet at December 31, 2020 has been derived from audited consolidated financial statements. However, it does not include all of the information and notes required by U.S. GAAP for complete consolidated financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020 and the notes thereto included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on April 15, 2021. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY | Note 2 – Liquidity The Company generated an operating loss of $782,890 and a net loss of $4,222,157 during the three months ended March 31, 2021. As of March 31, 2021, the Company had cash and stockholders’ equity of $8,515,824 and $18,490,578, respectively. At March 31, 2021, the Company had working capital of $3,919,847. Given the Company’s cash position at March 31, 2021 and its projected cash flow from operations, the Company believes that it will have sufficient capital to sustain operations for a period of one year following the date of this filing. The Company may also raise funds through equity or debt offerings to increase its working capital and to accelerate the execution of its long-term strategic plan to develop and commercialize its core products and to fulfill its product development commitments. As described in Note 6, the coronavirus could continue to significantly impact the Company’s business, which would require the Company to raise funds to assist with its working capital needs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Note 3 – Summary Of Significant Accounting Policies Use of estimates in the financial statements The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management evaluates these significant estimates and assumptions including those related to the fair value of acquired assets and liabilities, stock based compensation, derivative instruments, income taxes, accounts receivable and inventories, right-of-use assets and other matters that affect the condensed consolidated financial statements and disclosures. Actual results could differ from those estimates. Principles of consolidation The condensed consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. Revenue Recognition The Company’s revenues consist of product sales to either end customers or to distributors and its sales are recognized at a point-in-time under the core principle of recognizing revenue when control of the product transfers to the customer. The Company recognizes revenue when it ships or delivers the product from its fulfillment center to its customer, when the customer accepts and has legal title of the product, and the Company has a present right to payment for the product. For the three months ended March 31, 2021 and 2020, the Company had no sales recognized over time. The Company invoices its customers at the same time that the Company’s performance obligation is satisfied. The Company generally receives customer orders with a specified delivery date and orders typically fluctuate from month-to-month based on customer demand and general business conditions. The Company offers standard product warranty coverage which provides assurance that the Company’s products will conform to the contractually agreed-upon specifications for a limited period from the date of shipment. The Company’s warranty liabilities and related expense have not been material and were not material in the accompanying condensed consolidated financial statements as of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and 2020. Accounts Receivable Accounts receivable is stated at net realizable value. The Company regularly reviews accounts receivable balances and adjusts the receivable reserves as necessary whenever events or circumstances indicate the carrying value may not be recoverable. At March 31, 2021 and December 31, 2020, the Company had an allowance for doubtful accounts of $52,111 and $126,733, respectively. Inventory The Company performs regular reviews of inventory quantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessary with estimated valuation reserves for excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or production requirements. As of March 31, 2021, inventory was comprised of $204,695 in raw materials and $575,784 in finished goods on hand. Inventory at December 31, 2020 was comprised of $199,523 in raw materials and $567,828 in finished goods on hand. The Company is required to prepay for certain inventory with certain vendors until credit terms can be established. As of March 31, 2021 and December 31, 2020, the Company had prepaid inventory of $353,173 and $332,475, respectively. These prepayments were made primarily for finished goods inventory, and prepaid inventory is included in prepaid expenses and other current assets on the condensed consolidated balance sheets. Other Intangible Assets At March 31, 2021, the other intangible assets relating to the acquisition of LogicMark are comprised of patents of $2,353,804; trademarks of $962,990; and customer relationships of $1,733,823. At December 31, 2020, the other intangible assets relating to the acquisition of LogicMark are comprised of patents of $2,445,709; trademarks of $978,494; and customer relationships of $1,814,259. The Company will continue amortizing these intangible assets using the straight-line method over their estimated useful lives which for the patents, trademarks and customer relationships are 11 years; 20 years; and 10 years, respectively. During the three months ended March 31, 2021 and 2020, the Company had amortization expense of $187,845 and $187,845, respectively, related to the LogicMark intangible assets. As of March 31, 2021, total amortization expense estimated for the remainder of fiscal year 2021 is approximately $574,000, and for each of the next five fiscal years, 2022 through 2026, the total amortization expense is estimated to be as follows: 2022 - $762,000; 2023 - $762,000; 2024 - $762,000; 2025 - $762,000; and 2026 - $619,000. Stock-Based Compensation The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Non-employee stock-based compensation charges are amortized over the vesting period or as earned. Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash. The Company generally issues new shares of common stock to satisfy conversion and warrant exercises. Net Loss per Share Basic loss per share was computed using the weighted average number of shares of common stock outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities from the exercise of stock options to purchase 363,640 shares of common stock and warrants to purchase 9,378,133 shares of common stock as of March 31, 2021 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. As of March 31, 2020, potentially dilutive securities from the exercise of stock options to purchase 114,288 shares of common stock and warrants to purchase 6,973,221 shares of common stock were excluded from the computation of diluted net loss per share because the exercise price of the common stock equivalents was greater than the average market price of the common shares for the three month period ended March 31, 2020. Recent Accounting Pronouncements Recent accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Debt Refinancing
Debt Refinancing | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
DEBT REFINANCING | Note 4 – Debt refinancing On May 3, 2019, LogicMark completed the closing of a $16,500,000 senior secured term loan with the lenders thereto and CrowdOut Capital LLC, as administrative agent. The Company used the proceeds from the term loan to repay LogicMark’s prior term loan facility with Sagard Holdings Manager LP and to pay other costs related to the refinancing. The original maturity date of the term loan with CrowdOut Capital LLC was May 3, 2022 and required the Company to make minimum principal payments over the three-year term amortized over 96 months. During the three months ended March 31, 2021, the Company made scheduled principal repayments totaling $515,625. On February 8, 2021, LogicMark entered into a second amendment to the senior secured term loan with CrowOut Capital LLC. Pursuant to the second amendment, LogicMark made a $5,000,000 voluntary prepayment on the principal amount of the term loan and paid a prepayment premium of $125,000, which was equivalent to 2.5% of the prepayment, rather than 5% of the prepayment as required by the Credit Agreement. The prepayment premium is included in interest expense for three months ended March 31, 2021 in the condensed consolidated statement of operations. In addition, the maturity date of the term loan was extended to March 22, 2023. The outstanding principal amount of the Term Loan bears interest at a rate of LIBOR, adjusted monthly, plus 11.0% per annum (approximately 13.0% as of March 31, 2021). The Company incurred $412,500 in original issue discount for closing related fees charged by the Lender. During the three months ended March 31, 2021, the Company amortized $77,800 of the original issue discount which is included in interest expense in the condensed consolidated statement of operations. At March 31, 2021 the unamortized balance of the original issue discount was $60,055. The Company also incurred $1,831,989 in deferred debt issue costs related to the term loan. Debt Maturity The maturity of the Company’s term debt is as follows: 2021 (remainder) $ 1,546,875 2022 2,062,500 2023 1,970,877 Total term debt $ 5,580,252 On November 16, 2020, the Company and CrowdOut Capital LLC, as administrative agent, entered into the first amendment to the senior secured term loan. In connection with the first amendment, CrowdOut Capital LLC, as administrative agent, agreed to modify the financial ratios contained in the senior secured term retroactively and prospectively. Based on the senior secured term loan, as amended, the Company was in compliance with such covenants at March 31, 2021. Paycheck Protection Program On each of May 6 and May 8, 2020, Nxt-ID Inc. and LogicMark, LLC, a wholly owned subsidiary of the Company (the “Borrowers”), respectively, received loans (the “Loans”) from Bank of America, NA in the aggregate amount of $346,390, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act, which was enacted on March 27, 2020. The Loans, which are in the form of PPP promissory notes and agreements, dated May 1, 2020 (the “Note Agreements”), mature on May 6 and May 8, 2022, respectively, and bear interest at a rate of 1.00% fixed per annum, payable monthly commencing on November 6 and November 8, 2020, respectively. The Loans may be prepaid by the Borrowers at any time prior to maturity with no prepayment penalties. The Borrowers used the proceeds from the Loans for payroll, payroll taxes, and group healthcare benefits. Under the terms of the Note Agreements, certain amounts of the Loans may be forgiven if they are used for qualifying expenses, as described in the Note Agreements. On March 2, 2021, the Company’s wholly-owned subsidiary, LogicMark, LLC received notification from the Small Business Administration that repayment of its loan under the Paycheck Protection Program in the amount of $301,390 plus accrued interest of $2,320 has been forgiven. The income resulting from the forgiveness of the PPP loan and accrued interest is included in other income in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2021. The Company has also applied for forgiveness of its PPP loan in the amount of $45,000; however, as of the date of this filing, the Company has not received formal notification from the SBA that such loan repayment has been forgiven. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | Note 5 – Stockholders’ Equity February 2021 Offering On February 2, 2021, the Company closed a registered direct offering pursuant to which the Company issued (i) an aggregate of 1,476,016 shares of Series E preferred stock, convertible into an aggregate of up to 2,952,032 shares of common stock, (ii) common stock purchase warrants to purchase up to an aggregate of 1,000,000 shares of common stock at an exercise price of $1.23 per share, subject to customary adjustments thereunder, which were exercisable immediately upon issuance and have a term of five years, and (iii) common stock purchase warrants to purchase up to an aggregate of 1,952,032 shares of common stock at an exercise price of $1.23 per share with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, subject to customary adjustments thereunder, for gross proceeds of $4,000,003, before deducting any offering expenses. The Company will use the net proceeds from this offering for working capital and liability reduction purposes including additional term debt repayment. In February 2021, 1,476,016 shares of Series E preferred stock were converted into 2,952,032 shares of common stock. During the three months ended March 31, 2021, the Company recorded a deemed dividend of $1,480,801 from the beneficial conversion feature associated with the issuance of the Series E convertible preferred stock and warrants. December 2020 Offering On December 18, 2020, the Company closed a registered direct offering pursuant to which the Company issued (i) an aggregate of 1,515,151 shares of Series D preferred stock, convertible into an aggregate of up to 3,030,304 shares of common stock, (ii) common stock purchase warrants to purchase up to an aggregate of 1,000,000 shares of common stock at an exercise price of $0.49 per share, subject to customary adjustments thereunder, which were exercisable immediately upon issuance and have a term of five years, and (iii) common stock purchase warrants to purchase up to an aggregate of 5,060,606 shares of common stock at an exercise price of $0.49 per share with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, subject to customary adjustments thereunder, for gross proceeds of $2,000,000, before deducting any offering expenses. The Company will use the net proceeds from this offering for working capital, new product initiatives and other general corporate purposes. On December 21, 2020, 1,515,151 shares of Series D preferred stock were converted into 3,030,304 shares of common stock. During the year ended December 31, 2020, the Company recorded a deemed dividend of $758,922 from the beneficial conversion feature associated with the issuance of the Series D convertible preferred stock and warrants. July 2020 Offering On July 14, 2020, the Company closed a registered direct offering of (i) an aggregate of 3,778,513 shares of the Company’s common stock, par value $0.0001 per share; (ii) pre-funded warrants to purchase up to an aggregate of 734,965 shares of Common Stock at an exercise price of $0.01 per share, subject to customary adjustments thereunder; (iii) registered warrants, with a term of five (5) years exercisable immediately upon issuance, to purchase an aggregate of up to 1,579,718 shares of Common Stock (at an exercise price of $0.50 per share, subject to customary adjustments thereunder; and (iv) unregistered warrants, with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, to purchase an aggregate of up to 3,750,000 shares of Common Stock at an exercise price of $0.65 per share, subject to customary adjustments thereunder, for gross proceeds of $1,864,528, before deducting any offering expenses. The Company will continue to use the net proceeds from this Offering for working capital, new product initiatives and other general corporate purposes. On July 28, 2020, the Company received proceeds of $7,350 in connection with the exercise of 734,965 pre-funded warrants to purchase common stock at an exercise price of $0.01. 2013 Long-Term Stock Incentive Plan On January 4, 2013, a majority of the Company’s stockholders approved by written consent the Company’s 2013 Long-Term Stock Incentive Plan (“LTIP”). The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards, stock issued to directors for serving on the Company’s board of directors, and stock appreciation rights, is limited to 10% of the shares of common stock outstanding on the first business or trading day of any fiscal year, which is 1,201,715 shares of common stock at January 1, 2021. On March 31, 2021, the Company issued an aggregate of 28,368 stock options to purchase shares of common stock under the LTIP to four (4) non-employee directors for serving on the Company’s board. The exercise price of these stock options is $1.41 and stock options were fully vested at the issuance date. The aggregate fair value of the stock options issued to the directors was $40,000. 2017 Stock Incentive Plan On August 24, 2017, a majority of the Company’s stockholders approved at the 2017 Annual Stockholders’ Meeting the 2017 Stock Incentive Plan (“2017 SIP”). The aggregate maximum number of shares of common stock (including shares underlying options) that may be issued under the 2017 SIP pursuant to awards of restricted shares or options will be limited to 10% of the outstanding shares of common stock, which calculation shall be made on the first (1 st In addition, during the three months ended March 31, 2021, the Company issued 132,826 shares of common stock with an aggregate fair value of $80,456 to certain employees related to the Company’s 2018 and 2019 management incentive plans. During the three months ended March 31, 2021, the Company accrued $50,000 of management and employee bonus expense. Warrants On January 8, 2021, the Company entered into a Warrant Amendment and Exercise Agreement (the “Amendment Agreement”) with holders (the “Holder”) of a common stock purchase warrant, dated April 4, 2019, previously issued by the Company to the Holder (the “Original Warrant”). In consideration for each exercise of the Original Warrant that occurs within 45 calendar days of the date of the Amendment Agreement, in addition to the issuance of the Warrant Shares (as defined in the Original Warrant) on or prior to the Warrant Share Delivery Date (as defined in the Original Warrant), the Company has agreed to deliver to the Investor a new warrant to purchase a number of shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), equal to the number of Original Warrants that the Holder has exercised pursuant to the terms of the Original Warrant, at an exercise price of $1.525 per share, which represents the average Nasdaq Official Closing Price of the Common Stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the date of the Amendment Agreement (the “New Warrants”). The Investor originally held Original Warrants exercisable for up to 2,469,136 shares of Common Stock, and, therefore, could receive up to an equivalent number of New Warrants. Under the terms and conditions of the Warrant Amendment and Exercise Agreement, the Investor could continue to exercise the Original Warrants after 45 calendar days of the date of the Amendment Agreement, but the Investor would not receive any New Warrants in consideration for the exercise of any Original Warrants exercised thereafter. The Amendment Agreement contains customary representations, warranties and covenants by each of the Company and the Investor. On January 29, 2021 and February 8, 2021, the Investor exercised 500,000 and 1,969,136, respectively of the Original Warrants. The New Warrants issued, are exercisable for up to the original expiration dates of the Original Warrants, which is April 4, 2024. The exercise price and number of shares issuable upon exercise of the New Warrants are subject to traditional adjustment for stock splits, combinations, recapitalization events and certain dilutive issuances. The New Warrants are required to be exercised for cash; however, if during the term of the New Warrants there is not an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), covering the resale of the shares of Common Stock issuable upon exercise of the New Warrants, then the New Warrants may be exercised on a cashless (net exercise) basis pursuant to the formula provided in the New Warrants. The Company intends to use the proceeds from the exercise of the Original Warrants for working capital purposes, the launch of new products and to reduce its debt outstanding. The Company recorded a warrant modification expense of $2,881,729 for the three months ended March 31, 2021 resulting from the issuance of 2,469,136 replacement warrants with an exercise price of $1.525 for warrants that were exercised during the three months ended March 31, 2021. As of March 31, 2021, the Company had outstanding warrants to purchase an aggregate of 9,378,133 shares of common stock with a weighted average exercise price and remaining life of $1.70 and 3.71 years, respectively. During the three months ended March 31, 2021, 86,072 warrants expired. At March 31, 2021, the warrants had an aggregate intrinsic value of $2,328,639. During the three months ended March 31, 2021, 3,749,000 warrants were exercised on a cashless basis and were converted into 2,073,687 shares of common stock. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 6 – Commitments and Contingencies Legal Matters On February 24, 2020, Michael J. Orlando, as shareholder representative (the “Shareholder Representative”), and the other stockholders of Fit Pay, Inc. (collectively, the “Fit Pay Shareholders”), filed a lawsuit in the United States District Court for the Southern District of New York against the Company, CrowdOut Capital, LLC, and Garmin International, Inc. (the “Complaint”). See Orlando v. Nxt-ID, Inc. No. 20-cv-1604 (S.D.N.Y.). The Complaint alleges that the Company has breached certain contractual obligations under a merger agreement, dated May 23, 2017, between Fit Pay, Inc. and the Company, regarding certain future, contingent earnout payments allegedly that could be owed to the Fit Pay Shareholders from future revenues. The Complaint seeks unspecified monetary damages from the defendants. The Company believes that these claims are without merit and is vigorously defending the action. On May 12, 2020, the Company filed an answer and counterclaims alleging, among other things, fraud and breach of fiduciary duty of the Shareholder Representative as well as arguing that the Shareholder Representative should be estopped from pursuing these claims. The Company has moved for summary judgment to have the lawsuit dismissed. The Company has been able to successfully stay discovery pending the court’s ruling on motions to dismiss by Garmin International, Inc. and CrowdOut Capital, LLC. In March 2021, following our successful application to stay all discovery, the court granted CrowdOut’s and Garmin’s separate motions to dismiss. Orlando’s claim against the Company still remains and the Company’s motion for summary judgment is still pending. In connection with the sale of Fit-Pay, Inc., Giesecke+Devrient Mobile Security America, Inc. (“GDMSAI”) has identified a disagreement with the Company over calculation of dividends with respect to GDMSAI’s Series C Non-Convertible Voting Preferred Stock (the “Series C”) of the Company. On August 13, 2020, the Company was sued by GDMSAI seeking, among other things, $440,000 of dividends that it believes are owed to it pursuant to the terms of the Series C. The Company believes that GDMSAI’s claims are not correct and plans to vigorously defend the action. The Company has moved to have the case removed from Delaware to New York, where the Company claims the forum clause requires the claims to be heard. The Company has opposed GDMSAI’s motion for summary judgment. In March 2021, a Delaware Chancery court rejected our argument that the Fit Pay merger agreement requires litigation solely in New York and thereafter granted GDMSAI summary judgment on the merits, holding that relevant dividend language required a perpetually paid dividend once the $50M threshold had been achieved. The Company has filed a notice of appeal and plans to appeal the Delaware Chancery court decision. There are no assurances that our appeal will be successful and even if our appeal is successful that a New York court will agree with our interpretation of the manner in which dividends on the Series C Preferred are to be calculated. If the Company is unsuccessful, it will be responsible for paying $440,000 of dividends plus interest. The judgment may also trigger an event of default with our senior debt facility. Although the Company is attempting to negotiate a waiver of this provision in its credit agreement, there are no assurances that it will be successful in doing so or on terms reasonably favorable to the Company. From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of our business. Other than the above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of our subsidiaries, threatened against or affecting our company, or any of our subsidiaries in which an adverse decision could have a material adverse effect upon our business, operating results, or financial condition. Commitments The Company leases office space and a fulfillment center in the U.S., which are classified as operating leases expiring at various dates. The Company determines if an arrangement qualifies as a lease at the lease inception. Operating lease liabilities are recorded based on the present value of the future lease payments over the lease term, assessed as of the commencement date. The Company’s real estate leases, which are for office space and a fulfillment center, generally have a lease term between 3 and 5 years. The Company also leases a copier with a lease term of 5 years. The Company’s leases are comprised of fixed lease payments and also include executory costs such as common area maintenance, as well as property insurance and property taxes. The Company has elected to account for the lease and non-lease components as a single lease component for its real estate leases. Lease payments, which may include lease components, non-lease components and non-components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. Any actual costs in excess of such amounts are expensed as incurred as variable lease cost. The Company’s lease agreements generally do not specify an implicit borrowing rate, and as such, the Company utilizes its incremental borrowing rate by lease term, in order to calculate the present value of the future lease payments. The discount rate represents a risk-adjusted rate on a secured basis, and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term. On January 1, 2019, the discount rate used on existing leases at adoption was determined based on the remaining lease term using available data as of that date. The Company’s lease agreement for its former warehouse space located in Louisville, Kentucky expired on August 31, 2020. As a result, the Company entered into a new five-year lease agreement in June 2020 for new warehouse space also located in Louisville, Kentucky. The monthly rent which commenced in September 2020 is $6,000 per month and increases approximately 3% annually thereafter. The ROU asset value added as a result of this new lease agreement was $279,024. The Company’s ROU asset and lease liability accounts reflect the inclusion of this new lease agreement on the Company’s condensed consolidated balance sheet as of March 31, 2021. Certain of the Company’s lease agreements, primarily related to real estate, include options for the Company to either renew (extend) or early terminate the lease. Leases with renewal options allow the Company to extend the lease term typically between 1 and 3 years. Renewal options are reviewed at lease commencement to determine if such options are reasonably certain of being exercised, which could impact the lease term. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including but not limited to, significance of leasehold improvements incurred on the property, whether the asset is difficult to replace, or specific characteristics unique to the particular lease that would make it reasonably certain that the Company would exercise such option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company (and thus not included in the Company’s ROU asset and lease liability) unless there is an economic, financial or business reason to do so. For the three months ended March 31, 2021, total operating lease cost was $26,736 and is recorded in cost of sales and selling, general and administrative expenses, dependent on the nature of the leased asset. The operating lease cost is recognized on a straight-line basis over the lease term. The following summarizes (i) the future minimum undiscounted lease payments under non-cancelable lease for the remainder of 2021 as well as each of the next five years and thereafter, incorporating the practical expedient to account for lease and non-lease components as a single lease component for our existing real estate leases, (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities recognized, and (iii) the lease-related account balances on the Company’s condensed consolidated balance sheet, as of March 31, 2021: Year Ending December 31, 2021 (excluding the three months ended March 31, 2021) $ 68,439 2022 93,385 2023 89,724 2024 80,000 2025 54,400 Total future minimum lease payments $ 385,948 Less imputed interest (90,412 ) Total present value of future minimum lease payments $ 295,536 As of March 31, 2021 Operating lease right-of-use assets $ 292,797 Other accrued expenses $ 56,827 Other long-term liabilities $ 238,709 $ 295,536 As of March 31, 2021 Weighted Average Remaining Lease Term 4.03 years Weighted Average Discount Rate 12.86 % Coronavirus – COVID-19 On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic. Sales volumes and the related revenues for most of the Company’s products and services were significantly impacted during the latter portion of the first quarter and throughout the balance of 2020 as a result of the healthcare industry’s focus on COVID prevention and treatment, which impacted the markets we serve, in particular the VA hospitals and clinics. Sales of the Company’s products and services have continued to be impacted as various policies were implemented by federal, state and local governments in response to the COVID-19 pandemic, the public remains wary of real or perceived opportunities for exposure to the virus. The Company believes the extent of the COVID-19 pandemic’s impact on its operating results and financial condition has been and will continue to be driven by many factors, most of which are beyond the Company’s control and ability to forecast. Although the Company has experienced some positive trends during the first four months of 2021, because of these uncertainties, the Company cannot estimate how long or to what extent the pandemic will impact its operations. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 7 – Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the financial statements are issued. On May 3, 2021, the Company’s wholly-owned subsidiary, LogicMark, LLC, made a $3,000,000 voluntary prepayment (the “Prepayment”) on its term loan. The Company did not incur a prepayment premium as it relates to this voluntary prepayment. After this prepayment, the Company’s term loan balance is $2,236,502. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS | Use of estimates in the financial statements The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management evaluates these significant estimates and assumptions including those related to the fair value of acquired assets and liabilities, stock based compensation, derivative instruments, income taxes, accounts receivable and inventories, right-of-use assets and other matters that affect the condensed consolidated financial statements and disclosures. Actual results could differ from those estimates. |
PRINCIPLES OF CONSOLIDATION | Principles of consolidation The condensed consolidated financial statements include the accounts of Nxt-ID and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. |
REVENUE RECOGNITION | Revenue Recognition The Company’s revenues consist of product sales to either end customers or to distributors and its sales are recognized at a point-in-time under the core principle of recognizing revenue when control of the product transfers to the customer. The Company recognizes revenue when it ships or delivers the product from its fulfillment center to its customer, when the customer accepts and has legal title of the product, and the Company has a present right to payment for the product. For the three months ended March 31, 2021 and 2020, the Company had no sales recognized over time. The Company invoices its customers at the same time that the Company’s performance obligation is satisfied. The Company generally receives customer orders with a specified delivery date and orders typically fluctuate from month-to-month based on customer demand and general business conditions. The Company offers standard product warranty coverage which provides assurance that the Company’s products will conform to the contractually agreed-upon specifications for a limited period from the date of shipment. The Company’s warranty liabilities and related expense have not been material and were not material in the accompanying condensed consolidated financial statements as of March 31, 2021 and December 31, 2020, and for the three months ended March 31, 2021 and 2020. |
ACCOUNTS RECEIVABLE | Accounts Receivable Accounts receivable is stated at net realizable value. The Company regularly reviews accounts receivable balances and adjusts the receivable reserves as necessary whenever events or circumstances indicate the carrying value may not be recoverable. At March 31, 2021 and December 31, 2020, the Company had an allowance for doubtful accounts of $52,111 and $126,733, respectively. |
INVENTORY | Inventory The Company performs regular reviews of inventory quantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessary with estimated valuation reserves for excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or production requirements. As of March 31, 2021, inventory was comprised of $204,695 in raw materials and $575,784 in finished goods on hand. Inventory at December 31, 2020 was comprised of $199,523 in raw materials and $567,828 in finished goods on hand. The Company is required to prepay for certain inventory with certain vendors until credit terms can be established. As of March 31, 2021 and December 31, 2020, the Company had prepaid inventory of $353,173 and $332,475, respectively. These prepayments were made primarily for finished goods inventory, and prepaid inventory is included in prepaid expenses and other current assets on the condensed consolidated balance sheets. |
OTHER INTANGIBLE ASSETS | Other Intangible Assets At March 31, 2021, the other intangible assets relating to the acquisition of LogicMark are comprised of patents of $2,353,804; trademarks of $962,990; and customer relationships of $1,733,823. At December 31, 2020, the other intangible assets relating to the acquisition of LogicMark are comprised of patents of $2,445,709; trademarks of $978,494; and customer relationships of $1,814,259. The Company will continue amortizing these intangible assets using the straight-line method over their estimated useful lives which for the patents, trademarks and customer relationships are 11 years; 20 years; and 10 years, respectively. During the three months ended March 31, 2021 and 2020, the Company had amortization expense of $187,845 and $187,845, respectively, related to the LogicMark intangible assets. As of March 31, 2021, total amortization expense estimated for the remainder of fiscal year 2021 is approximately $574,000, and for each of the next five fiscal years, 2022 through 2026, the total amortization expense is estimated to be as follows: 2022 - $762,000; 2023 - $762,000; 2024 - $762,000; 2025 - $762,000; and 2026 - $619,000. |
STOCK-BASED COMPENSATION | Stock-Based Compensation The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Non-employee stock-based compensation charges are amortized over the vesting period or as earned. Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash. The Company generally issues new shares of common stock to satisfy conversion and warrant exercises. |
NET LOSS PER SHARE | Net Loss per Share Basic loss per share was computed using the weighted average number of shares of common stock outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities from the exercise of stock options to purchase 363,640 shares of common stock and warrants to purchase 9,378,133 shares of common stock as of March 31, 2021 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. As of March 31, 2020, potentially dilutive securities from the exercise of stock options to purchase 114,288 shares of common stock and warrants to purchase 6,973,221 shares of common stock were excluded from the computation of diluted net loss per share because the exercise price of the common stock equivalents was greater than the average market price of the common shares for the three month period ended March 31, 2020. |
RECENT ACCOUNTING PRONOUNCEMENTS | Recent Accounting Pronouncements Recent accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s consolidated financial statements upon adoption. |
Debt Refinancing (Tables)
Debt Refinancing (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of maturity of the company's term debt | 2021 (remainder) $ 1,546,875 2022 2,062,500 2023 1,970,877 Total term debt $ 5,580,252 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future lease obligation | Year Ending December 31, 2021 (excluding the three months ended March 31, 2021) $ 68,439 2022 93,385 2023 89,724 2024 80,000 2025 54,400 Total future minimum lease payments $ 385,948 Less imputed interest (90,412 ) Total present value of future minimum lease payments $ 295,536 |
Schedule of lease expense | As of March 31, 2021 Operating lease right-of-use assets $ 292,797 Other accrued expenses $ 56,827 Other long-term liabilities $ 238,709 $ 295,536 As of March 31, 2021 Weighted Average Remaining Lease Term 4.03 years Weighted Average Discount Rate 12.86 % |
Liquidity (Details)
Liquidity (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Operating loss | $ (782,890) | $ 1,039,406 | ||
Net loss | (4,222,157) | |||
Cash | 8,515,824 | $ 4,387,416 | ||
Stockholders' equity | 18,490,578 | $ 7,284,280 | $ 9,159,209 | $ 6,714,588 |
Working capital deficiency | $ 3,919,847 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Product Information [Line Items] | |||
Allowance for doubtful accounts | $ 52,111 | $ 126,733 | |
Inventory raw materials | 204,695 | 199,523 | |
Inventory finished goods | 575,784 | 567,828 | |
Prepaid inventory | 353,173 | 332,475 | |
Amortization expense of intangible assets | 187,845 | $ 187,845 | |
Amortization expense estimated for 2021 | 574,000 | ||
Amortization expense estimated for 2022 | 762,000 | ||
Amortization expense estimated for 2023 | 762,000 | ||
Amortization expense estimated for 2024 | 762,000 | ||
Amortization expense estimated for 2025 | 762,000 | ||
Amortization expense estimated for 2026 | 619,000 | ||
Stock options to purchase (in Shares) | 114,288 | ||
Potentially dilutive securities (in Shares) | 6,973,221 | ||
LogicMark [Member] | Patents [Member] | |||
Product Information [Line Items] | |||
Fair value of patents | 2,353,804 | $ 2,445,709 | |
Other intangible assets, estimated useful lives | 11 years | ||
LogicMark [Member] | Trademarks [Member] | |||
Product Information [Line Items] | |||
Fair value of trademarks | 962,990 | $ 978,494 | |
Other intangible assets, estimated useful lives | 20 years | ||
LogicMark [Member] | Customer Relationships [Member] | |||
Product Information [Line Items] | |||
Fair value of customer relationships | $ 1,733,823 | $ 1,814,259 | |
Other intangible assets, estimated useful lives | 10 years | ||
Warrant [Member] | |||
Product Information [Line Items] | |||
Stock options to purchase (in Shares) | 363,640 | ||
Potentially dilutive securities (in Shares) | 9,378,133 |
Debt Refinancing (Details)
Debt Refinancing (Details) - USD ($) | Mar. 02, 2021 | Feb. 08, 2021 | May 08, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | May 03, 2019 |
Debt Refinancing (Details) [Line Items] | ||||||
Maturity date | Mar. 22, 2023 | |||||
Principal repayments | $ 515,625 | |||||
Voluntary prepayment principal amount | $ 5,000,000 | |||||
Prepayment, description | the term loan and paid a prepayment premium of $125,000, which was equivalent to 2.5% of the prepayment, rather than 5% of the prepayment as required by the Credit Agreement. | |||||
Percentage of term loan bears interest rate | 6.50% | |||||
Amortized of deferred debt issue costs | $ 402,454 | $ 148,317 | ||||
Credit agreement, description | The deferred debt issue costs include an exit fee of $1,072,500 which is equivalent to 6.5% of the term loan amount borrowed from CrowdOut Capital. | |||||
Exit fee | $ 1,072,500 | |||||
Loan receivable | $ 346,390 | |||||
Paycheck Protection Program, description | The Loans, which are in the form of PPP promissory notes and agreements, dated May 1, 2020 (the “Note Agreements”), mature on May 6 and May 8, 2022, respectively, and bear interest at a rate of 1.00% fixed per annum, payable monthly commencing on November 6 and November 8, 2020, respectively. | |||||
Paycheck Protection Program in amount | $ 301,390 | |||||
Accrued interest | $ 2,320 | |||||
Forgiveness of PPP loan amount | 45,000 | |||||
Lender Concentration Risk [Member] | ||||||
Debt Refinancing (Details) [Line Items] | ||||||
Principal amount | 412,500 | |||||
Amortized of deferred debt issue costs | $ 77,800 | |||||
Term Loan [Member] | ||||||
Debt Refinancing (Details) [Line Items] | ||||||
Principal amount | $ 16,500,000 | |||||
Maturity date | May 3, 2022 | |||||
Percentage of term loan bears interest rate | 11.00% | 13.00% | ||||
Amortized of deferred debt issue costs | $ 402,454 | |||||
Debt discount | 60,055 | |||||
Deferred debt issue costs | 1,831,989 | |||||
Unamortized debt issuance expense | $ 310,665 |
Debt Refinancing (Details) - Sc
Debt Refinancing (Details) - Schedule of maturity of the Company's debt | Mar. 31, 2021USD ($) |
Schedule of maturity of the Company's debt [Abstract] | |
2021 (remainder) | $ 1,546,875 |
2022 | 2,062,500 |
2023 | 1,970,877 |
Total term debt | $ 5,580,252 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Feb. 08, 2021 | Feb. 02, 2021 | Jul. 14, 2020 | Jun. 11, 2019 | Aug. 24, 2017 | Jan. 04, 2013 | Jan. 19, 2021 | Dec. 18, 2020 | Jul. 28, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Registered direct offering, description | (i) an aggregate of 1,476,016 shares of Series E preferred stock, convertible into an aggregate of up to 2,952,032 shares of common stock, (ii) common stock purchase warrants to purchase up to an aggregate of 1,000,000 shares of common stock at an exercise price of $1.23 per share, subject to customary adjustments thereunder, which were exercisable immediately upon issuance and have a term of five years, and (iii) common stock purchase warrants to purchase up to an aggregate of 1,952,032 shares of common stock at an exercise price of $1.23 per share with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, subject to customary adjustments thereunder, for gross proceeds of $4,000,003, before deducting any offering expenses. The Company will use the net proceeds from this offering for working capital and liability reduction purposes including additional term debt repayment. In February 2021, 1,476,016 shares of Series E preferred stock were converted into 2,952,032 shares of common stock. | |||||||||||
Deemed dividend from beneficial conversion feature | ||||||||||||
Gross proceeds | $ 7,350 | |||||||||||
Common stock shares issued (in Shares) | 734,965 | |||||||||||
Warrant exercise price (in Dollars per share) | $ 0.01 | $ 1.525 | ||||||||||
Stock options exercise price (in Dollars per share) | $ 1.41 | |||||||||||
Employee bonus expense | $ 50,000 | |||||||||||
Common stock, par value (in Dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||||
Preferred stock dividend | $ 75,000 | $ 25,000 | ||||||||||
Warrant modification expense | $ 2,881,729 | |||||||||||
Issuance of warrants (in Shares) | 2,469,136 | |||||||||||
Warrants outstanding to purchase aggregate of common stock | $ 9,378,133 | |||||||||||
Weighted average exercise price (in Dollars per share) | $ 1.70 | |||||||||||
Weighted average remaining life | 3 years 259 days | |||||||||||
Warrants expired shares (in Shares) | 86,072 | |||||||||||
Proceeds received | $ 6,670,494 | |||||||||||
December 2020 Offerings [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Registered direct offering, description | (i) an aggregate of 1,515,151 shares of Series D preferred stock, convertible into an aggregate of up to 3,030,304 shares of common stock, (ii) common stock purchase warrants to purchase up to an aggregate of 1,000,000 shares of common stock at an exercise price of $0.49 per share, subject to customary adjustments thereunder, which were exercisable immediately upon issuance and have a term of five years, and (iii) common stock purchase warrants to purchase up to an aggregate of 5,060,606 shares of common stock at an exercise price of $0.49 per share with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, subject to customary adjustments thereunder, for gross proceeds of $2,000,000, before deducting any offering expenses. The Company will use the net proceeds from this offering for working capital, new product initiatives and other general corporate purposes. On December 21, 2020, 1,515,151 shares of Series D preferred stock were converted into 3,030,304 shares of common stock. | |||||||||||
July 2020 Offerings [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Registered direct offering, description | On July 14, 2020, the Company closed a registered direct offering of (i) an aggregate of 3,778,513 shares of the Company’s common stock, par value $0.0001 per share; (ii) pre-funded warrants to purchase up to an aggregate of 734,965 shares of Common Stock at an exercise price of $0.01 per share, subject to customary adjustments thereunder; (iii) registered warrants, with a term of five (5) years exercisable immediately upon issuance, to purchase an aggregate of up to 1,579,718 shares of Common Stock (at an exercise price of $0.50 per share, subject to customary adjustments thereunder; and (iv) unregistered warrants, with a term of five and one-half (5.5) years first exercisable six (6) months after issuance, to purchase an aggregate of up to 3,750,000 shares of Common Stock at an exercise price of $0.65 per share, subject to customary adjustments thereunder, for gross proceeds of $1,864,528, before deducting any offering expenses. | |||||||||||
2013 Long-Term Stock Incentive Plan [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Common stock shares issued (in Shares) | 28,368 | |||||||||||
Long-term stock incentive plan, description | The maximum aggregate number of shares of common stock that may be issued under the LTIP, including stock awards, stock issued to directors for serving on the Company’s board of directors, and stock appreciation rights, is limited to 10% of the shares of common stock outstanding on the first business or trading day of any fiscal year, which is 1,201,715 shares of common stock at January 1, 2021. | |||||||||||
2017 Stock Incentive Plan [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Common stock voting rights, description | The aggregate maximum number of shares of common stock (including shares underlying options) that may be issued under the 2017 SIP pursuant to awards of restricted shares or options will be limited to 10% of the outstanding shares of common stock, which calculation shall be made on the first (1st) business day of each new fiscal year; provided that for fiscal year 2017, 1,500,000 shares of common stock may be delivered to participants under the 2017 SIP. Thereafter, the 10% provision shall govern the 2017 SIP. | |||||||||||
Warrant [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Warrant exercise price (in Dollars per share) | $ 1.525 | |||||||||||
Original warrants exercisable shares of common stock (in Shares) | 2,469,136 | |||||||||||
Warrant [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Proceeds received | $ 3,749,000 | |||||||||||
Exercise of warrants (in Shares) | 2,073,687 | |||||||||||
Director [Member] | 2013 Long-Term Stock Incentive Plan [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Aggregate fair value | $ 40,000 | |||||||||||
Non Executive Employees [Member] | 2017 Management Incentive Plan [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Aggregate fair value | 132,826 | |||||||||||
Series E convertible preferred stock and the warrants [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Deemed dividend from beneficial conversion feature | $ 1,480,801 | |||||||||||
Series D convertible preferred stock and the warrants [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Deemed dividend from beneficial conversion feature | $ 758,922 | |||||||||||
Series C Preferred Stock [Member] | ||||||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||||||
Preferred stock dividend | $ 1,969,136 | $ 2,328,639 | $ 500,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | Aug. 13, 2020 | Mar. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Dividends amount | $ 440,000 | |
Perpetually paid dividend, description | In March 2021, a Delaware Chancery court rejected our argument that the Fit Pay merger agreement requires litigation solely in New York and thereafter granted GDMSAI summary judgment on the merits, holding that relevant dividend language required a perpetually paid dividend once the $50M threshold had been achieved. | |
Dividends plus interest payable | $ 440,000 | |
Real estate lease term, description | The Company’s real estate leases, which are for office space and a fulfillment center, generally have a lease term between 3 and 5 years. The Company also leases a copier with a lease term of 5 years. | |
Monthly rent | $ 6,000 | |
Increasing annual rent, percentage | 3.00% | |
New lease agreement | $ 279,024 | |
Lease term renewal term, description | Leases with renewal options allow the Company to extend the lease term typically between 1 and 3 years. | |
Operating lease cost | $ 26,736 | |
Operating lease, description | The following summarizes (i) the future minimum undiscounted lease payments under non-cancelable lease for the remainder of 2021 as well as each of the next five years and thereafter, incorporating the practical expedient to account for lease and non-lease components as a single lease component for our existing real estate leases, (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities recognized, and (iii) the lease-related account balances on the Company’s condensed consolidated balance sheet, as of March 31, 2021: |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of future lease obligation | Mar. 31, 2021USD ($) |
Schedule of future lease obligation [Abstract] | |
2021 (excluding the three months ended March 31, 2021) | $ 68,439 |
2022 | 93,385 |
2023 | 89,724 |
2024 | 80,000 |
2025 | 54,400 |
Total future minimum lease payments | 385,948 |
Less imputed interest | (90,412) |
Total present value of future minimum lease payments | $ 295,536 |
Commitments and Contingencies_4
Commitments and Contingencies (Details) - Schedule of lease expense - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of lease expense [Abstract] | ||
Operating lease right-of-use assets | $ 292,797 | $ 306,786 |
Other accrued expenses | 56,827 | |
Other long-term liabilities | 238,709 | |
Total | $ 295,536 | |
Weighted Average Remaining Lease Term | 4 years 10 days | |
Weighted Average Discount Rate | 12.86% |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] | May 03, 2021USD ($) |
Subsequent Events (Details) [Line Items] | |
Voluntary prepayment | $ 3,000,000 |
Loan term balance | $ 2,236,502 |