Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Document Information Line Items | ||
Entity Registrant Name | BRAIN SCIENTIFIC INC. | |
Trading Symbol | N/A | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 105,401,858 | |
Amendment Flag | false | |
Entity Central Index Key | 0001662382 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 000-56216 | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 81-0876714 | |
Entity Address, Address Line One | 6700 Professional Parkway | |
Entity Address, City or Town | Lakewood Ranch | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 34240 | |
City Area Code | (917) | |
Local Phone Number | 388-1578 | |
Title of 12(b) Security | N/A | |
Security Exchange Name | NONE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash | $ 2,029,839 | $ 785,363 |
Accounts receivable | 5,971 | 16,922 |
Inventory | 126,132 | 146,090 |
Advances to officers | 16,941 | |
Prepaid expenses and other current assets | 290,795 | 166,458 |
TOTAL CURRENT ASSETS | 2,452,737 | 1,131,774 |
Property and equipment, net | 124,740 | 122,979 |
Intangible assets, net | 10,343,538 | 10,920,577 |
Goodwill | 913,184 | 913,184 |
Operating lease right-of-use asset | 107,617 | 191,702 |
Long-term prepaid insurance | 80,000 | 95,000 |
TOTAL ASSETS | 14,021,816 | 13,375,216 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 2,653,036 | 2,987,264 |
Accrued director’s fees | 75,000 | 75,000 |
Accrued interest | 172,407 | 356,998 |
Convertible notes payable, net | 1,912,523 | 337,000 |
Notes payable | 320,000 | |
Loans payable | 6,667 | 6,667 |
Notes payable - related party | 47,998 | 155,989 |
Derivative liabilities | 1,857,351 | |
Operating lease liability, current portion | 81,012 | 104,591 |
TOTAL CURRENT LIABILITIES | 6,805,994 | 4,343,509 |
Convertible notes payable, net | 9,635,551 | |
Operating lease liability, net of current portion | 29,150 | 91,089 |
TOTAL LIABILITIES | 6,835,144 | 14,070,149 |
Commitments and contingencies– Note 17 | ||
STOCKHOLDERS' EQUITY (DEFICIT) | ||
Preferred stock, $0.001 par value; 10,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021 | ||
Common stock, $0.001 par value; 200,000,000 shares authorized, 105,401,858 and 50,217,308 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 105,402 | 50,217 |
Additional paid in capital | 38,474,527 | 21,537,763 |
Accumulated deficit | (31,389,283) | (22,278,923) |
Accumulated other comprehensive loss | (3,974) | (3,990) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 7,186,672 | (694,933) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ 14,021,816 | $ 13,375,216 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 105,401,858 | 50,217,308 |
Common stock, shares outstanding | 105,401,858 | 50,217,308 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
REVENUE | $ 11,432 | $ 5,275 | $ 209,484 | $ 14,482 |
COST OF GOODS SOLD | 4,058 | 4,143 | 148,701 | 7,840 |
GROSS PROFIT | 7,374 | 1,132 | 60,783 | 6,642 |
SELLING, GENERAL AND ADMINISTRATIVE | ||||
Research and development | 56,684 | 48,282 | 224,405 | 147,324 |
Professional fees | 94,014 | 247,423 | 538,188 | 573,309 |
Sales and marketing expenses | 165,414 | 260,832 | 570,666 | 498,583 |
Share based compensation | 2,625,571 | 3,204,382 | ||
General and administrative expenses | 1,083,778 | 1,177,077 | 3,628,337 | 2,292,775 |
TOTAL SELLING, GENERAL AND ADMINISTRATIVE | 4,025,461 | 1,733,614 | 8,165,978 | 3,511,991 |
LOSS FROM OPERATIONS | (4,018,087) | (1,732,482) | (8,105,195) | (3,505,349) |
OTHER INCOME (EXPENSE): | ||||
Interest expense | (703,232) | (68,357) | (2,589,486) | (182,574) |
Other income | 347 | 7,252 | ||
Gain on forgiveness of paycheck protection loan | 112,338 | |||
Change in fair market value of derivative liabilities | 284,289 | 1,375,048 | ||
Gain on settlement of derivatives | 201,097 | |||
Foreign currency transaction gain (loss) | (70) | 924 | ||
TOTAL OTHER EXPENSE | (418,666) | (68,357) | (1,005,165) | (70,236) |
LOSS BEFORE INCOME TAXES | (4,436,753) | (1,800,839) | (9,110,360) | (3,575,585) |
PROVISION FOR INCOME TAXES | ||||
NET LOSS | (4,436,753) | (1,800,839) | (9,110,360) | (3,575,585) |
OTHER COMPREHENSIVE LOSS | ||||
Foreign currency translation adjustment | 1,338 | 16 | ||
TOTAL COMPREHENSIVE LOSS | $ (4,435,415) | $ (1,800,839) | $ (9,110,344) | $ (3,575,585) |
NET LOSS PER COMMON SHARE | ||||
Net loss per common share, basic (in Dollars per share) | $ (0.04) | $ (0.06) | $ (0.13) | $ (0.12) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | ||||
Weighted average number of common shares outstanding, basic (in Shares) | 105,401,858 | 29,520,454 | 72,516,279 | 29,520,454 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Net loss per common share, diluted | $ (0.04) | $ (0.06) | $ (0.13) | $ (0.12) |
Weighted average number of common shares outstanding, diluted (in Shares) | 105,401,858 | 29,520,454 | 72,516,279 | 29,520,454 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Deficit) (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Balances at Dec. 31, 2020 | $ 29,520 | $ 11,141,129 | $ (13,178,237) | $ (2,007,588) | |
Balances (in Shares) at Dec. 31, 2020 | 29,520,454 | ||||
Net loss | (654,004) | (654,004) | |||
Balances at Mar. 31, 2021 | $ 29,520 | 11,141,129 | (13,832,241) | (2,661,592) | |
Balances (in Shares) at Mar. 31, 2021 | 29,520,454 | ||||
Balances at Dec. 31, 2020 | $ 29,520 | 11,141,129 | (13,178,237) | (2,007,588) | |
Balances (in Shares) at Dec. 31, 2020 | 29,520,454 | ||||
Net loss | (3,575,585) | ||||
Balances at Sep. 30, 2021 | $ 29,520 | 11,141,129 | (16,753,822) | (5,583,173) | |
Balances (in Shares) at Sep. 30, 2021 | 29,520,454 | ||||
Balances at Mar. 31, 2021 | $ 29,520 | 11,141,129 | (13,832,241) | (2,661,592) | |
Balances (in Shares) at Mar. 31, 2021 | 29,520,454 | ||||
Net loss | (1,120,742) | (1,120,742) | |||
Balances at Jun. 30, 2021 | $ 29,520 | 11,141,129 | (14,952,983) | (3,782,334) | |
Balances (in Shares) at Jun. 30, 2021 | 29,520,454 | ||||
Net loss | (1,800,839) | (1,800,839) | |||
Balances at Sep. 30, 2021 | $ 29,520 | 11,141,129 | (16,753,822) | (5,583,173) | |
Balances (in Shares) at Sep. 30, 2021 | 29,520,454 | ||||
Balances at Dec. 31, 2021 | $ 50,217 | 21,537,763 | (22,278,923) | (3,990) | (694,933) |
Balances (in Shares) at Dec. 31, 2021 | 50,217,308 | ||||
Fair value of stock options vested | 235,690 | 235,690 | |||
Issuance of common stock for services | $ 361 | 129,489 | 129,850 | ||
Issuance of common stock for services (in Shares) | 360,695 | ||||
Foreign currency translation adjustment | 451 | 451 | |||
Net loss | (2,159,938) | (2,159,938) | |||
Balances at Mar. 31, 2022 | $ 50,578 | 21,902,942 | (24,438,861) | (3,539) | (2,488,880) |
Balances (in Shares) at Mar. 31, 2022 | 50,578,003 | ||||
Balances at Dec. 31, 2021 | $ 50,217 | 21,537,763 | (22,278,923) | (3,990) | (694,933) |
Balances (in Shares) at Dec. 31, 2021 | 50,217,308 | ||||
Net loss | (9,110,360) | ||||
Balances at Sep. 30, 2022 | $ 105,402 | 38,474,527 | (31,389,283) | (3,974) | 7,186,672 |
Balances (in Shares) at Sep. 30, 2022 | 105,401,858 | ||||
Balances at Mar. 31, 2022 | $ 50,578 | 21,902,942 | (24,438,861) | (3,539) | (2,488,880) |
Balances (in Shares) at Mar. 31, 2022 | 50,578,003 | ||||
Fair value of stock options vested | 280,510 | 280,510 | |||
Conversion of convertible debt into common shares | $ 54,824 | 13,665,504 | 13,720,328 | ||
Conversion of convertible debt into common shares (in Shares) | 54,823,855 | ||||
Foreign currency translation adjustment | (1,773) | (1,773) | |||
Net loss | (2,513,669) | (2,513,669) | |||
Balances at Jun. 30, 2022 | $ 105,402 | 35,848,956 | (26,952,530) | (5,312) | 8,996,516 |
Balances (in Shares) at Jun. 30, 2022 | 105,401,858 | ||||
Fair value of stock options vested | 2,625,571 | 2,625,571 | |||
Foreign currency translation adjustment | 1,338 | 1,338 | |||
Net loss | (4,436,753) | (4,436,753) | |||
Balances at Sep. 30, 2022 | $ 105,402 | $ 38,474,527 | $ (31,389,283) | $ (3,974) | $ 7,186,672 |
Balances (in Shares) at Sep. 30, 2022 | 105,401,858 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (9,110,360) | $ (3,575,585) |
Change in net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 602,744 | 19,736 |
Amortization of debt discount and non-cash interest expense | 1,892,418 | |
Change in fair market value of derivative liabilities | (1,375,048) | |
Amortization of right of use asset | 1,685 | |
Gain on forgiveness of paycheck protection loan | (112,338) | |
Gain on settlement of lease | (1,660) | |
Fair value of stock options vested | 3,204,382 | |
Gain on debt extinguishment | (201,097) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 10,951 | (2,529) |
Due from related parties | (43,423) | |
Inventory | 19,958 | (62,239) |
Advances to officers | 16,941 | 1,060 |
Prepaid expenses and other current assets | (124,337) | (33,511) |
Long-term prepaid insurance | 15,000 | |
Accounts payable and accrued expenses | (195,489) | 833,008 |
Accrued interest | 553,677 | 182,575 |
Operating lease liabilities, net | 227 | |
NET CASH USED IN OPERATING ACTIVITIES | (4,691,693) | (2,791,561) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash paid for notes receivable | (603,067) | |
Purchase of property and equipment | (27,466) | (38,339) |
NET CASH USED IN INVESTING ACTIVITIES | (27,466) | (641,406) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from convertible notes payable, net of issuance costs | 6,421,610 | |
Proceeds from note payable | 3,469,982 | |
Repayment of related party loan | (53,000) | |
Repayment of convertible note payable | (30,000) | |
Repayment of promissory note and interest | (320,000) | |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 6,018,610 | 3,469,982 |
Effect of exchange rate changes on cash | (54,975) | |
NET CHANGE IN CASH | 1,244,476 | 37,015 |
CASH AT BEGINNING OF THE PERIOD | 785,363 | 68,943 |
CASH AT END OF THE PERIOD | 2,029,839 | 105,958 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | 106,039 | |
Cash paid for taxes | ||
Supplemental Disclosure of Non-Cash Investing and Financing Activities | ||
Accounts payable settled with share issuance | 129,850 | |
Services received settled with derivative warrants | 156,399 | |
Convertible notes payable and accrued interest converted to common shares | $ 13,921,427 |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Nature of Operations [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Brain Scientific Inc. (the “Company”), was incorporated under the laws of the state of Nevada on November 18, 2013 under the name All Soft Gels Inc. On October 1, 2021, the Company acquired Piezo Motion Corp (“Piezo”), a privately held Delaware corporation formed in January 2020. Upon completion of the acquisition, Piezo is treated as the surviving entity and accounting acquirer although the Company was the legal acquirer. Accordingly, the Company’s historical financial statements are those of Piezo. The Company has two lines of operations. The MemoryMD subsidiary group is involved in cloud computing, data analytics and medical device technology in the NeuroTech and brain monitoring industries, seeking to commercialize its EEG devices and caps. The Piezo subsidiary group is focused on the ultrasonic standing wave-type piezo motor technology for rotary and linear motion and has experience in the research and development, as well as the manufacturing of piezo motors for high-tech industries across the globe. The Company is headquartered in Sarasota, Florida. Reverse Merger and Corporate Restructure On June 11, 2021, the Company entered into a merger agreement (the “Merger Agreement”) with Piezo and BRSF Acquisition Inc. to acquire Piezo (the “Acquisition”). The transactions contemplated by the Merger Agreement were consummated on October 1, 2021 and, pursuant to the terms of the Merger Agreement, all outstanding shares of Piezo were exchanged for 29,520,454 shares of the Company’s common stock and Piezo became the Company’s wholly owned subsidiary. The Merger was effected pursuant to the Merger Agreement. The Merger was accounted for as a reverse merger whereby Piezo was the acquirer for accounting purposes. Piezo is considered the acquiring company for accounting purposes as upon completion of the Merger, Piezo’s former stockholders held a majority of the voting interest of the combined company. Pursuant to the Merger, the Company issued shares of its common stock to Piezo’s stockholders, at an exchange ratio of 2.93 shares of the Company’s common stock. All references to common stock, share and per share amounts have been retroactively restated to reflect the reverse recapitalization as if the transaction had taken place as of the beginning of the earliest period presented. Acquisition Accounting The fair value of Brain Scientific assets acquired and liabilities assumed was based upon management’s estimates assisted by an independent third-party valuation firm. The following table summarizes the allocation of purchase price of the acquisition: Allocation Tangible Assets Acquired: Net working capital $ (1,186,622 ) Right of use asset 40,093 Lease liability (46,970 ) Net Tangible Assets Acquired $ (1,193,499 ) Intangible Assets Acquired: Licenses and trademarks Brain Scientific Trade Name 133,000 MemoryMD Trade Name 504,000 Neurocap Trade Name 188,000 Neuro EEG Trade Name 11,000 Patent products NeuroCap Developed Technology 10,242,000 NeuroEEG Developed Technology 35,000 Net Intangible Assets Acquired $ 11,113,000 Total Fair Value of Assets Acquired $ 9,919,501 Consideration: Fair value of equity received 7,240,222 Liabilities assumed 2,987,152 Loans forgiven 605,311 Total consideration $ 10,832,685 Goodwill $ 913,184 Unaudited Interim Financial Information The Company has prepared the accompanying condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting. These consolidated financial statements are unaudited and, in the Company’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals necessary for a fair presentation of its balance sheets, operating results, and cash flows for the periods presented. Operating results for the periods presented are not necessarily indicative of the results that may be expected for 2022. Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted in accordance with the rules and regulations of the SEC. These consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and its subsidiaries, Piezo Motion Corp, Discovery Technology International, Inc., MemoryMD, Inc., MemoryMD – Russia and MemoryMD - Europe. All significant consolidated transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the useful life of property and equipment and assumptions used in the valuation of options, warrants and derivative liabilities. Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At September 30, 2022 and December 31, 2021, the Company had no cash equivalents. The Company’s cash is held with financial institutions, and the account balances may, at times, exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit. Accounts are insured by the FDIC up to $250,000 per financial institution. The Company has not experienced any losses in such accounts with these financial institutions. As of September 30, 2022, and December 31, 2021, the Company had $1,621,012 and $277,989, respectively, in excess over the FDIC insurance limit. I nventory Inventory consists of raw material, works in progress and finished goods that are valued at lower of cost or market using the weighted average method. Property and Equipment Property, plant and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying statements of operations of the respective period. The estimated useful lives range from 3 to 7 years. Intangible assets, net Intangible assets are measured at cost less accumulated amortization and impairment losses, if any. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values, and amortization methods are reviewed at each year end, and any changes in estimates are accounted for prospectively. Patents 15 years Licenses and trademarks 9 years Amortization expense is included in the consolidated income statement within general and administrative expenses. The asset is tested annually and during interim periods for impairment if there is a trigger for impairment. Goodwill Goodwill represents the excess of the consideration transferred over the fair value of the net identifiable assets acquired. Goodwill is evaluated for impairment annually or whenever we identify certain triggering events or circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Events or circumstances that might indicate an interim evaluation is warranted include, among other things, unexpected adverse business conditions, macro and reporting unit specific economic factors (for example, interest rate and foreign exchange rate fluctuations, and loss of key personnel), supply costs, unanticipated competitive activities, and acts by governments and courts. Convertible Notes Payable The Company has issued convertible notes, which contain variable conversion features, whereby the outstanding principal and accrued interest automatically convert into common shares at a fixed price which may be at a discount to the common stock at the time of conversion. For certain notes, the conversion features are contingent upon future events, whereby, the holder agreed not to convert until the contingent future event has occurred. Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). The Company has determined that product delivery is the primary performance obligation, and as such recognizes revenues upon delivery to the customer. If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Noncash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company recognizes revenue from the sale of NeuroCaps, as well as revenue from the sale of goods purchased through manufacturers of medical devices. Primarily all revenues for the nine months ended September 30, 2022 are from the sale of medical devices purchased from Neurotech. Revenues for the nine months ended September 30, 2021 of $14,482 related to the sales of Piezo evaluation kits. Research and Development Costs The Company expenses all research and development costs as they are incurred. Research and development includes expenditures in connection with in-house research and development salaries and staff costs, application and filing for regulatory approval of proposed products, regulatory and scientific consulting fees, as well as contract research, data collection, and monitoring, related to the research and development of the cloud infrastructure, data imaging, and proprietary products and technology. Research and development costs recognized in the statement of operations for the three and nine months ended September 30, 2022 were $56,684 and $224,405, respectively. Research and development costs recognized in the statement of operations for the three and nine months ended September 30, 2021 were $48,282 and $147,324, respectively. Sales and Marketing Advertising and marketing costs are expensed as incurred. Advertising and marketing costs recognized in the statement of operations for the three and nine months ended September 30, 2022 were $165,414 and $570,666, respectively. Advertising and marketing costs recognized in the statement of operations for the three and nine months ended September 30, 2021 were $260,832 and $498,583, respectively. Stock-based Compensation The Company measures and recognizes compensation expense for all stock-based payments at fair value over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and warrants. Equity-based compensation expense is recorded in administrative expenses based on the classification of the employee or vendor. The determination of fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as by assumptions regarding a number of subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. Basic and Diluted Net Loss Per Common Share Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options, warrants and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, the basic and diluted per share amounts for all periods presented are identical. In the three months ended September 30, 2022 and 2021, 159,239,497, and 0 anti-dilutive securities were excluded from the computation, respectively. Fair Value of Financial Instruments The Company’s financial instruments are measured and recorded at fair value based on inputs and assumptions that market participants would use in pricing an asset or a liability. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, management considers the principal or most advantageous market in which the Company would transact, and also considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. Fair value is determined for assets and liabilities using a three-tiered value hierarchy into which these assets and liabilities are grouped based upon significant inputs as follows: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, 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. ● Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. When a determination is made to classify a financial instrument within Level 3, the determination is based upon the lack of significance of the observable parameters to the overall fair value measurement. However, the fair value determination for Level 3 financial instruments may consider some observable market inputs. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The carrying values of cash, prepaid expenses and other current assets, convertible notes, accounts payable, loans payable and due to others approximate fair value due to the short-term nature of these items. As of September 30, 2022, the Company had a Level 3 financial instrument related to the derivative liabilities related to the issuance of convertible debt and warrants. The Company did not have any other Level 1, Level 2 or Level 3 assets or liabilities as of December 31, 2021. Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheet as of September 30, 2022. Liabilities Amounts Level 1 Level 2 Level 3 Derivative liability – conversion feature $ 1,159,000 $ - $ - $ 1,159,000 Derivative liability – warrants 698,351 - - 698,351 Total $ 1,857,351 $ - $ - $ 1,857,351 Income Taxes The Company accounts for income taxes using the asset-and-liability method in accordance with ASC Topic 740, “Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the enactment date. A valuation allowance is recorded if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized in future periods. The Company follows the guidance in ASC Topic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely-than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority. The Company recognizes the impact of an uncertain income tax position in the financial statements if it believes that the position is more likely than not to be sustained by the relevant taxing authority. The Company will recognize interest and penalties related to tax positions in income tax expense. As of September 30, 2022, and December 31, 2021, the Company had no unrecognized uncertain income tax positions. Reclassification Certain prior period balances have been reclassified to conform to current year presentation. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2022 | |
Going Concern [Abstract] | |
GOING CONCERN | NOTE 3 – GOING CONCERN The accompanying financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern for a period of one year from the issuance of these financial statements. For the nine months ended September 30, 2022, the Company had $209,484 in revenues, a net loss of $9,110,360 and had net cash used in operations of $4,691,693. Additionally, as of September 30, 2022, the Company had an accumulated deficit and negative working capital of $31,389,283 and $4,353,257, respectively. It is management’s opinion that these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of twelve months from the date of the issuance of these financial statements. The financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of this uncertainty. Successful completion of the Company’s development program and, ultimately, the attainment of profitable operations are dependent upon future events, including obtaining adequate financing to fulfill its development activities, acceptance of the Company’s patent applications and ultimately achieving a level of sales adequate to support the Company’s cost structure. However, there can be no assurances that the Company will be able to secure additional equity investments or achieve an adequate sales level. |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 4 – INVENTORY September 30, December 31, Raw materials $ 76,379 $ 93,190 Works in progress 11,911 11,857 Finished goods 37,842 41,043 Total $ 126,132 $ 146,090 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2022 | |
Prepaid Expenses And Other Current Assets [Abstract] | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | NOTE 5 – PREPAID EXPENSES AND OTHER CURRENT ASSETS September 30, December 31, Prepaid insurance $ 145,734 $ 105,900 Prepaid production costs 119,331 - Other prepaid expenses 11,352 46,170 Lease deposits 14,378 14,378 Other assets - 10 Total $ 290,795 $ 166,458 As of September 30, 2022 and December 31, 2021, there was a total amount of $80,000 and $95,000 of long-term prepaid insurance, respectively. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 6 – PROPERTY AND EQUIPMENT Property and equipment, net consists of the following: September 30, December 31, Machinery and equipment $ 204,143 $ 176,678 Leasehold improvements 12,283 12,283 216,426 188,961 Less: Accumulated depreciation (91,686 ) (65,982 ) Total $ 124,740 $ 122,979 Depreciation expense was $8,635 and $25,704 for the three and nine months ended September 30, 2022, respectively. Depreciation expense was $7,538 and $19,376 for the three and nine months ended September 30, 2021, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 7 – INTANGIBLE ASSETS, NET The components of the acquired intangible assets were as follows: September 30, December 31, Average Patent products $ 10,277,000 $ 10,277,000 15.4 Licenses and trademarks 836,000 836,000 9 Intangible assets $ 11,113,000 $ 11,113,000 Less: Accumulated amortization (769,462 ) (192,423 ) Total $ 10,343,538 $ 10,920,577 Amortization expense was $192,365 and $577,039 for the three and nine months ended September 30, 2022, respectively. There was no intangible amortization expense for the three and nine month periods ended September 30, 2021. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Payable and Accrued Expenses [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable as of September 30, 2022 and December 31, 2021 consisted of the following: September 30, December 31, Trade payables $ 1,143,649 $ 1,101,028 Accrued payroll and related expenses 1,380,194 1,593,925 Accrued expenses 122,311 255,820 Customer deposits 6,882 36,491 Total $ 2,653,036 $ 2,987,264 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses – Related Party | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Payable And Accrued Expenses Related Party [Abstract] | |
ACCOUNTS PAYABLE AND ACCRUED EXPENSES – RELATED PARTY | NOTE 9 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES – RELATED PARTY Accounts payable related parties as of September 30, 2022 and December 31, 2021 consists of accrued director’s fees in the amount of $75,000. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable, Net [Abstract] | |
CONVERTIBLE NOTES PAYABLE | NOTE 10 – CONVERTIBLE NOTES PAYABLE Short Term Assumed convertible debt As part of the merger, the Company assumed $891,133 of outstanding convertible debt. During the fourth quarter of 2021, the Company paid off $574,133, and signed an amendment to one of the debt agreements increasing the debt by $20,000, resulting in an outstanding balance of the assumed convertible debt as of December 31, 2021 of $337,000. The assumed convertible debt is made up of the 2019 Note and the Convertible Grid note whose terms are described below. During the nine months ended September 30, 2022, the Company converted the Grid Notes totaling $250,000 into common stock, added $33,000 of accrued interest to the 2019 Note principal as per an amendment to the agreement, and paid off $30,000 of principal of the 2019 Note, resulting in a balance of $90,000 at September 30, 2022. 2019 Note On December 31, 2019, the Company entered into a Securities Purchase Agreement and issued and sold to a third party a Convertible Note in the original principal amount of $275,000 (the “Note”), and a warrant to purchase 100,000 shares of the Company’s common stock (the “Warrant”). A one-time interest charge of 8% was applied on December 31, 2019 and will be payable, along with the Principal, on the maturity date. On December 30, 2021, the Company signed an allonge amending the Note extending the maturity date to April 30, 2022 and amending the outstanding balance and payment schedule to provide for two equal payments of $60,000 on March 31, 2022 and April 30, 2022. On March 31, 2022 the Company signed an allonge amending the Note, extending the maturity date to December 31, 2022 and amended the outstanding balance and payment schedule to provide for seven monthly payments of $10,000 plus interest at the rate of 14% per annum. The first monthly payment is payable on June 30, 2022. A final payment of $50,000 plus interest is due upon maturity. During the nine months ended September 30, 2022, the Company added accrued interest of $33,000 to the 2019 Note principal as per an amendment to the agreement, and paid off $30,000 of principal of the 2019 Note, resulting in a balance of $90,000 at September 30, 2022. The unpaid outstanding principal amount and accrued and unpaid interest under the Note shall be convertible into shares of the Company’s common stock at any time at the option of the investor. The conversion price was set at the merger to $0.28 which is equal to 80% multiplied by the price per share used in the merger calculations. The Note contains a price-based anti-dilution provision, pursuant to which the conversion price of the Note shall be reduced upon the occurrence of certain dilutive issuances of Company securities as set forth in the Note. The conversion of the Note is also subject to a beneficial ownership limitation of 4.99% of the number of shares of common stock outstanding immediately after giving effect to such conversion. In the event the Company, prior to the maturity date of the Note, issues any Security (as defined in the Note) with any term more favorable to the holder of such Security or with a term in favor of the holder of such Security that was not similarly provided to the Investor, then at the Investor’s option such term shall become a part of the Note. The Company also agreed to provide piggy-back registration rights to the investor pursuant to which the Company shall include all shares issuable upon conversion of the Note on the next registration statement the Company files with the Securities and Exchange Commission. The Note contains events of default which, among other things, entitle the Investor to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, the Note. Upon the occurrence of any event of default, the outstanding balance shall immediately and automatically increase to 130% of the outstanding balance immediately prior to the event of default, and the conversion price of the Note shall be redefined to equal 65% of the lowest trade accruing during the 10 consecutive Trading Days (as defined in the Note) immediately preceding the applicable Conversion Date (as defined in the Note). Nickolay Kukekov, a director of the Company, and a third party, each has personally guaranteed the repayment of the Note. The Warrant has an exercise price of $1.25 per share (the “Exercise Price”), subject to adjustments as provided in the Warrant, and has a term of five years. The Warrant contains a price-based anti-dilution provision, pursuant to which the exercise price of the Warrant shall be reduced upon the occurrence of certain dilutive issuances of securities as set forth in the Warrant, with a corresponding increase in the number of shares underlying the Warrant if the dilutive event occurs during the first three years of the Warrant, and a cashless exercise provision. The exercise of the Warrant is subject to a beneficial ownership limitation of 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. Convertible Grid Notes On April 21, 2020, the Company issued a Convertible Grid Promissory Note (the “Caleca Note”) to Thomas J. Caleca (“Caleca”), an existing stockholder of the Company, pursuant to which Caleca agreed to advance to the Company the aggregate principal amount of $125,000 (the “Caleca Aggregate Advance”). The Company also issued to Caleca a common stock purchase warrant (the “Caleca Warrant”), granting Caleca the right to purchase up to 750,000 shares of the Company’s common stock at a per share exercise price of $0.80 (subject to adjustment as set forth in the Caleca Warrant). Also on April 21, 2020, the Company issued a Convertible Grid Promissory Note (the “Brown Note”, and together with the Caleca Note, the “Grid Notes”) to Andrew Brown (“Brown”, and together with Caleca, the “Grid Investors”), an existing stockholder of the Company, pursuant to which Brown agreed to advance to the Company the aggregate principal amount of $125,000 (the “Brown Aggregate Advance”, and together with the Caleca Aggregate Advance, the “Aggregate Advance”). The Company also issued to Brown a common stock purchase warrant (the “Brown Warrant”, and together with the Caleca Warrant, the “Grid Warrants”), granting Brown the right to purchase up to 750,000 shares of the Company’s common stock at a per share exercise price of $0.80 (subject to adjustment as set forth in the Brown Warrant). The Grid Warrants are exercisable at any time commencing on the eighteen-month anniversary of the issuance of the Grid Warrants (as may be accelerated pursuant to the terms of the Grid Warrants) and expiring on the five-year anniversary of the issuance of the Grid Warrants. In 2021, the terms of the Grid Warrants were amended extending the first date of exercise to October 21, 2022. The Grid Notes bear interest on the unpaid balances at a fixed simple rate of twelve percent (12%) per annum (subject to a rate increase if the Company commits an Event of Default (as defined in the Grid Notes)), computed based on a 360-day year of twelve 30-day months, commencing on the date of the respective advance and payable quarterly. The principal amount of the Aggregate Advance, or so much thereof as has been advanced to the Company by the Grid Investors from time to time pursuant to the Grid Notes, was payable on April 21, 2021, which was amended to April 21, 2022. The Company had a total outstanding principal balance of $250,000 as of December 31, 2021 and accrued interest and $28,032 as of December 31, 2021, respectively. On April 20, 2022, the Grid Notes and accrued interest were converted into 287,282 shares of common stock. 2022 Notes On June 13, 2022, the Company consummated the first closing of a private placement offering whereby the Company entered into a Securities Purchase Agreement (SPA), dated as of June 13, 2022 with thirteen accredited investors, pursuant to which the investors purchased from the Company, for an aggregate purchase price of $5,110,000, (i) 10% Original Issue Discount Senior Secured Convertible Debentures (the “2022 Notes”), in the principal amount of $5,659,500 and (ii) 18,896,493 warrants to purchase shares of common stock of the Company at the same price as the debt conversion price. In addition, 2,015,626 warrants were issued to the book-runner of this offering (together with the 18,896,493 investor warrants – the “2022 warrants”). The 2022 Notes mature on June 13, 2023 and bear interest at an annual rate of 10%. Due the issuance costs and the derivatives associated with the 2022 Notes (see below), the Company recorded a debt discount of 4,470,289, which will be amortized using the effective interest method over the life of the loan. During the three and nine month periods ended September 30, 2022, the Company recorded discount amortization in the form of interest expense in the amounts of $553,200 and $633,312, respectively. The balance of the discount at September 30, 2022 was $3,836,977 The 2022 Warrants shall be exercisable at any time on or after the earlier of (i) the maturity date; or (ii) the closing of a registered offering of the Company’s securities for aggregate gross proceeds to the Company of at least $5,000,000, resulting in the listing for trading of the Common Stock on the NYSE American or The Nasdaq Capital Market (the “Qualified Offering”), and on or prior to December 13, 2028 (if no Qualified Offering has been consummated occurred on or prior to the maturity date of the 2022 Notes) or the date that is five years and nine months following the closing of the Qualified Offering. The 2022 Notes contain mandatory and voluntary conversion features as follows: (a) Mandatory Conversion. In the event a Qualified Offering is consummated prior to the maturity date of the 2022 Notes, the 2022 Notes automatically convert into shares of Common Stock, immediately upon the occurrence of a Qualified Offering (the “Mandatory Conversion”). The exercise price per share of Common Stock pursuant to the Warrant shall mean, in the case of a Mandatory Conversion, the price of the Common Stock (or unit, if units are offered in the Qualified Offering) in the Qualified Offering. (b) Voluntary Conversion. The holders of the 2022 Notes have the right (subject to the conversion limitations set forth therein) from time following the maturity date and prior to a Mandatory Conversion to convert all or any part of the outstanding and unpaid principal and interest then due under the 2022 Notes into fully paid and non-assessable shares of Common Stock (the “Voluntary Conversion”). The exercise price per share of Common Stock pursuant to the Warrant shall mean, in the case of a Voluntary Conversion, the lower of (i) $0.25 per share or (ii) 75% of the average of the VWAP of the Company’s Common Stock during the ten (10) Trading Day period immediately prior to the maturity date. In connection with the Offering, each of Piezo, and Memory MD, Inc., (the “Company Subsidiaries”) agreed to execute, in favor of the holders of the 2022 Notes, a guarantee to jointly and severally, unconditionally and irrevocably, guarantee to the holders the prompt and complete payment and performance when due of the Company’s obligations pursuant to the SPA. In connection with the Offering, the Company entered into a security agreement by and among the Company, each of the holders and the Company Subsidiaries, whereby the Company agreed to grant each of the holders a security interest in all of the assets of the Company, to secure the prompt payment, performance and discharge in full of all of the Company’s obligations under the 2022 Notes and the Company Subsidiaries’ obligations under the Guarantee. Long Term 2021 Notes In conjunction with the closing of the Merger on October 1, 2021, the Company conducted an initial closing under a private offering (the “Offering”) of 10% convertible promissory notes due and payable on April 1, 2023 (the “2021 Notes”). As part of the Offering, the Company exchanged the 2020 Notes and accrued interest as well as additional notes issued in 2021 with the same terms as the 2020 Notes and their accrued interest amounting to $4,328,407, as well as $1,540,508 of debt assumed in the merger into 2021 Notes. At the merger, the Company also issued a convertible promissory note to an investor in the amount of $2,950,000 with proceeds of $2,850,000 net of an original issuance discount, with the same terms as the 2021 Notes. The balance of the debt discount at December 31, 2021 was $83,364. Each holder of the 2021 Notes, provided that the note is still then outstanding, will be issued, on the earlier of (i) the date, if any, upon which the Company’s common stock is listed for trading on the NASDAQ stock exchange (the “Uplist”), and (ii) the date that is eighteen months from the date of issuance, a warrant to purchase an amount of shares of the Company’s common stock, equal to such holder’s Warrant Share Amount. For purposes of the foregoing, a holder’s “Warrant Share Amount” means (i) if such Warrant is issued in connection with the Uplist, one half of the initial principal balance of such Holder’s Note at issuance divided by the lesser of (A) $0.40, and (B) and the greater of (x) $0.20 and (y) one hundred twenty percent (120%) of the closing price for the Company’s common stock on the trading day prior to the date of the Uplist, and (ii) if such Warrant is issued otherwise than in connection with the Uplist, the initial principal balance of such Holder’s Note, divided by the lesser of (A) $0.40, and (B) and the greater of (x) $0.20 and (y) one hundred twenty percent (120%) of the volume weighted average price (“VWAP”) for the Company’s common stock over the five consecutive trading days immediately preceding the date that is eighteen months from the date of issuance. The 2021 Notes contain mandatory and voluntary conversion features as detailed in the agreement. On December 21, 2021, the Company consummated the second closing of the Offering whereby the Company entered into a Securities Purchase Agreement (the “SPA”) with three accredited investors, pursuant to which the investors purchased from the Company, 2021 Notes in the principal amount of $900,000. During the nine months ended September 30, 2022, the Company consummated additional closings of the Offering whereby the Company entered into a Securities Purchase Agreement (the “SPA”) with additional investors, pursuant to which the investors purchased from the Company, 2021 Notes in the principal amount of $2,000,000. As of December 31, 2021, the total amount of 2021 Notes principal outstanding was $9,718,915. As part of the issuance of the 2022 Notes, all of the 2021 Notes and accrued interest, as well as an additional 10% discount, was converted into shares of common stock. The holders of the 2021 Notes, in connection with their original investment, will also be entitled to warrants based on 50% coverage of their original investment amount. These warrants will have a term of four years after issuance and an exercise price of $0.25 per share. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | NOTE 11 - DERIVATIVE FINANCIAL INSTRUMENTS The Company evaluated the terms and conditions of the 2022 Notes (see note 10 above) under the guidance of ASC 815. The conversion terms of the convertible notes are variable based on certain factors, such as the future price of the Company’s common stock. The number of shares of common stock to be issued is based on the future price of the Company’s common stock. The number of shares of common stock issuable upon conversion of the promissory note is indeterminate. Due to the fact that the number of shares of common stock issuable could exceed the Company’s authorized share limit, the equity environment is tainted, and all additional convertible debentures and warrants are included in the value of the derivative liabilities. Pursuant to ASC 815-15 Embedded Derivatives, the fair values of the variable conversion options and warrants and shares to be issued were recorded as derivative liabilities on the issuance date and revalued at each reporting period. The Company evaluated the fair value of the derivatives utilizing the “with and without scenario” using options pricing models and Monte Carlo simulation, and a probability weighted value. As of September 30, 2022, the fair value of derivative liabilities in respect of the conversion feature and the warrants were $1,159,000 and $698,351, respectively. The following are the data and assumptions used in the conversion feature derivative valuations at the respective dates: Inception September 30, Common stock price $ 0.30 $ 0.12 Exercise price $ 0.33-0.36 0.33-0.36 Expected volatility 100.0 % 92.0-100.0 % Risk free rate 2.3-3.0 % 3.3-4.0 % Expected dividend yield 0 % 0 % Expected term (years) 0.55-1.25 0.25-0.95 Discount rate 37.7 % 37.7 % PV factor 0.67-0.84 0.80 The following are the data and assumptions used in the warrant derivative valuations at the respective dates: Inception September 30, Common stock price $ 0.30 $ 0.12 Expected volatility 100.0 % 98.0 % Expected term (years) 6.05 5.5 Risk free rate 3.5 % 4.0 % Expected dividend yield 0 % 0 % The following tables summarize the components of the Company’s derivative liabilities as of September 30, 2022 and December 31, 2021: Conversion Feature Warrants Total Balance at December 31, 2021 - - - Issuance – June 13, 2022 $ 1,610,000 $ 1,622,399 $ 3,232,399 Movement in fair value (451,000 ) (924,048 ) (1,375,048 ) Balance at September 30, 2022 $ 1,159,000 $ 698,351 $ 1,857,351 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Notes Payable, Net [Abstract] | |
NOTES PAYABLE | NOTE 12 – NOTES PAYABLE December 28, 2020 Note On December 28, 2020, the Company entered into a Securities Purchase Agreement (the “December Purchase Agreement”) dated as of December 28, 2020 (the “December 28 Issuance Date”) and issued and sold to an investor a Promissory Note (the “December 28 Note”) in the aggregate principal amount of $300,000. Pursuant to the December Purchase Agreement, in connection with the issuance of the December 28 Note, the Company issued two common stock purchase warrants (separately, “Warrant A” and “Warrant B”, and together, the “December Warrants”) to the investor, allowing the investor to purchase an aggregate of 500,000 shares of the Company’s common stock, with Warrant A being a commitment fee of 250,000 shares of common stock, and Warrant B being fully earned upon issuance as an additional commitment fee of 250,000 shares of common stock, provide that Warrant B is returnable to the Company upon the repayment of the December 28 Note, as an additional incentive for the repayment of the December 28 Note. The net amount received by the Company during the year ended December 31, 2020 was approximately $265,000 after payment of certain fees to the investor or on behalf of the investor. The December 28 Note bears interest commencing on the December 28 Issuance Date at a fixed rate of 12% per annum on any unpaid principal balance, and will be payable, along with the principal amount, on December 28, 2021. A lump-sum interest payment for one year is due on the December 28 Issuance Date and added to the principal balance and payable on the maturity date of the December 28 Note or upon acceleration or by prepayment or otherwise, notwithstanding the number of days which the principal is outstanding. Principal payments shall be made in 6 installments each in the amount of $56,000 commencing 180 days following the Issue Date (as defined in the Note) and continuing thereafter each 30 days for 5 months. The Company recorded debt discount of $300,000 related to the December 28 Note, which was fully amortized as of December 31, 2021. On December 28, 2021, the December 28 Note was amended to add $33,600 of interest, and to amend the payment terms to two equal payments of $184,800 due on February 28, 2022 and March 31, 2022. During the nine months ended September 30, 2022, the Company repaid all of the outstanding principal and interest. The December Warrants each have an exercise price of $1.20, subject to customary adjustments, and may be exercised at any time until the three-year anniversary of the December Warrants. The December Warrants include a cashless exercise provision as set forth therein. |
Notes Payable _ Related Party
Notes Payable – Related Party | 9 Months Ended |
Sep. 30, 2022 | |
Notes Payable – Related Party [Abstract] | |
NOTES PAYABLE – RELATED PARTY | NOTE 13 – NOTES PAYABLE – RELATED PARTY As part of the October 1, 2021 merger with Piezo. and BRSF Acquisition Corp., the Company assumed $155,530 of related party loans from entities related to the former executives and directors of the Company. When assumed, these loans did not bear interest and had a maturity date of December 31, 2021. On March 9, 2022, the loans were amended to provide for an interest rate of 9% per annum, and to extend the maturity dates to provide for payments of $53,000 with accrued interest on March 31, 2022 and June 1, 2022, and a payment of $49,000 plus accrued interest on August 1, 2022. On May 6, 2022 the payment terms were further amended to payments of $53,000 with accrued interest on May 31, 2022 and August 1, 2022, and a payment of $49,000 plus accrued interest on October 1, 2022. The Company has an outstanding loan from an officer of the Russian subsidiary in the amount of RUB 34,400. Interest and payment terms have not been determined. The USD equivalent at September 30, 2022 was $596. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
LEASES | NOTE 14 – LEASES The Company has two leases that are accounted for under ASC 842. The Company entered into a lease agreement for office space located in Sarasota, Florida. The term of the lease is for a period of two years commencing on February 1, 2021 and ending on February 1, 2023. The rent is $6,530 per month for year 1, $6,726 per month for year 2 and $6,928 per month for year 3. The Company will account for the lease under ASC 842 whereby the operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The Company had a lease agreement with terms up to 2 years for the lease of office space. The assets and liabilities from operating leases were recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. This lease was settled on January 1, 2022, and the Company recorded a gain of $1,660 in respect of the early settlement. Short-term leases, which have an initial term of 12 months or less, are not recorded on the balance sheet. The Company’s operating lease does not provide an implicit rate that can readily be determined. Therefore, we use a discount rate based on our incremental borrowing rate used at the date closest to lease inception. The Company’s weighted-average remaining lease term relating to its operating leases is 1.4 years, with a weighted-average discount rate of 10.00%. The Company incurred lease expense for its operating leases of $64,490 and $0 which was included in “General and administrative expenses,” for the nine months ended September 30, 2022 and 2021, respectively. The following table presents information about the amount and timing of liabilities arising from the Company’s operating lease as of September 30, 2022: Maturity of operating lease liabilities for the following fiscal years: 2022 $ 21,491 2023 88,325 2024 7,378 Total undiscounted finance lease payments 117,194 Less: Imputed interest (7,032 ) Present value of finance lease liabilities $ 110,162 At September 30, 2022, the operating lease right of use assets was $107,617. Supplemental balance sheet information related to the lease as of September 30, 2022 was: Operating lease right-of-use asset $ 107,617 Lease liability, current portion 81,012 Lease liability, long-term 29,150 Total operating lease liability $ 110,162 |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ DEFICIT | NOTE 15 – STOCKHOLDERS’ DEFICIT Preferred Stock The Company has authorized 10,000,000 shares of undesignated preferred stock with a $0.001 par value. As of September 30, 2022, no preferred shares have been issued and these shares are considered blank check preferred shares with no terms, limitations, or rights associated with them. Common Stock The Company has authorized 200,000,000 shares of common stock with a $0.001 par value per share. The holders of common stock are entitled to one vote for each share of common stock held at the time of vote. As of September 30, 2022, the Company had 105,401,858 shares outstanding or deemed outstanding. In June 2022, as part of the issuance of the 2022 Notes, prior convertible debt and accrued interest was converted into 54,823,855 shares of common stock. Shares Issued for Services In January 2022, the Company issued 360,695 shares to a service provider in respect of $129,850 of outstanding payables. Warrants The following table summarized the warrant activity for the nine months ended September 30, 2022: Number of Weighted Weighted Aggregate Warrants Shares Price Term Value Balance Outstanding, December 31, 2021 9,258,191 $ 0.45 6.85 $ 304,799 Granted 20,912,119 0.09 5.20 - Forfeited (47,059 ) Exercised Expired Balance Outstanding, September 30, 2022 30,123,251 $ 0.20 5.45 - Exercisable, September 30, 2022 7,711,132 $ 0.38 6.83 - Equity Incentive Plan As of September 21, 2018, the Company’s board of directors adopted, and stockholders approved the 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan has a 10-year term, which terminates on the day prior to the 10 th On October 1, 2021, the Board of Directors approved the issuance of options to purchase an aggregate of 4,504,214 shares of common stock to an executive and a director. The options have an exercise price of $0.35 per share and vested immediately upon issuance. The options will expire on October 1, 2031. The aggregate fair value of $1,270,188 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 5years, (ii) volatility of 115%, (iii) risk free rate of 0.93% (iv) dividend rate of zero, (v) stock price of $0.35, and (vi) exercise price of $0.35. The expense of 1,270,188 was recorded in full upon issuance. On October 21, 2021, the Board of Directors approved the issuance of options to purchase an aggregate of 1,218,248 shares of common stock to the CEO. The options have an exercise price of $0.39 per share with vesting terms of 304,562 vesting on April 21, 2022 and the remainder monthly ratably through October 21, 2023. The options will expire on October 21, 2031. The aggregate fair value of $372,384 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 4.65 years, (ii) volatility of 113.90%, (iii) risk free rate of 1.22% (iv) dividend rate of zero, (v) stock price of $0.39, and (vi) exercise price of $0.39. These options were amended on December 10, 2021 and December 30, 2021 adjusting the exercise price to $0.21 and the vesting schedule to vest equally at the end of each quarter in 2022. The expense will be amortized over the amended vesting period and a total of $36,667 was recorded during the year ended December 31, 2021. On December 10, 2021, the Board of Directors approved the issuance of options to purchase an aggregate of 2,718,247 shares of common stock to certain employees of the Company. The options have an exercise price of $0.21 per share with vesting terms of one quarter vesting on June 10, 2022 and the remainder monthly ratably through December 10, 2023. The options will expire on December 11, 2031. The aggregate fair value of $472,975 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 116.90%, (iii) risk free rate of 1.26% (iv) dividend rate of zero, (v) stock price of $0.21, and (vi) exercise price of $0.21. These options were amended on December 30, 2021 adjusting the vesting schedule to vest equally at the end of each quarter in 2022. As the share price had increased on the amendment date, the amendment resulted in an increase to the aggregate fair value of $111,166. The increased fair value along with the unamortized portion of the original fair value will be amortized over the amended vesting schedule. A total of $26,574 was recorded during the year ended December 31, 2021. On November 15, 2021, the Board of Directors approved the issuance of options to purchase an aggregate of 1,448,276 shares of common stock to the directors of the Company. The options have an exercise price of $0.29 per share and vest per days in service as members of the board of directors during the quarter, at the end of the quarter with the final quarterly vesting quarter end of December 31, 2022. The options will expire on December 11, 2031. The aggregate fair value of $341,793 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5.04 years, (ii) volatility of 115.8%, (iii) risk free rate of 1.25% (iv) dividend rate of zero, (v) stock price of $0.29, and (vi) exercise price of $0.29. The expense will be amortized over the vesting period and a total of $28,254 was recorded during the year ended December 31, 2021. On May 19, 2022, the Board of Directors approved the issuance of options to purchase an aggregate of 1,086,129 shares of common stock to certain employees of the Company. The options have an exercise price of $0.31 per share with vesting terms of one quarter/half vesting on November 19, 2022 and the remainder monthly ratably through May 19, 2023. The options will expire on May 19, 2032. The aggregate fair value of $271,324 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 115.0%, (iii) risk free rate of 2.80% (iv) dividend rate of zero, (v) stock price of $0.31, and (vi) exercise price of $0.31. The expense will be amortized over the vesting period and a total of $31,184 was recorded since issuance and through June 30, 2022. On August 19, 2022, the Board of Directors approved the issuance of options to purchase an aggregate of 25,788,141 shares of common stock to certain employees of the Company. The options have an exercise price of $0.12 per share with varying vesting terms through August 10, 2023. The options will expire on August 19, 2027. The aggregate fair value of $2,346,000 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 100.0%, (iii) risk free rate of 3.10% (iv) dividend rate of zero, (v) stock price of $0.12, and (vi) exercise price of $0.12. The expense will be amortized over the vesting period and a total of $2,277,618 was recorded since issuance and through September 30, 2022. The following table summarized the option activity for the nine months ended September 30, 2022: Number of Weighted Weighted Aggregate Options Shares Price Term Value Balance Outstanding, December 31, 2021 11,753,422 $ 0.36 9.47 $ 196,825 Granted 26,874,270 0.13 5.00 - Forfeited (476,190 ) 0.21 9.20 - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2022 38,151,502 $ 0.20 6.15 - Exercisable, September 30, 2022 35,344,654 $ 0.20 5.98 - For future periods, the remaining value of the stock options totaling approximately $513,807 will be amortized into the statement of operations consistent with the period for which the services will be rendered. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 16 – RELATED PARTY TRANSACTIONS The Company rents office space from a company in which Hassan Kotob, CEO, has an ownership. For the three and nine months ended September 30, 2022 and 2021, the Company incurred rental expense of $9,900 and $29,700, respectively, in respect of this office. On November 12, 2021, the Company entered into a Representation Agreement with LOK Corporation International Inc. (“LOK”), a corporation in which Daniel Cloutier, a director, serves as the chief executive officer. Under the Representation Agreement, LOK acts as the worldwide sales manager for our NeuroCap, NeuroEEG and their accessories. LOK is responsible for the evaluation of regional distribution, development, recruitment and training of the distribution network and provide in-country customer support. Fees for the services are 10% of sales occurring through the distribution channels. The contract term is for three years. To date, we have paid LOK approximately $4,750 for training platform development but no other service fees and no commissions. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 17 – COMMITMENTS AND CONTINGENCIES On February 18, 2022, the Company signed an outsourced manufacturing agreement with Bioana, S.A.P.I. DE C.V. The agreement is for three years, ending December 31, 2024 for a minimum order quantity of 10,000 NeuroCaps per annum. Unit cost for the NeuroCap is fixed for the first year ending December 31, 2022. The approximate cost for this agreement in 2022 is $350,000. The manufacturing agreement will renew annually unless terminated in writing by one of the parties. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18 – SUBSEQUENT EVENTS In accordance with ASC 855 “Subsequent Events,” Company management reviewed all material events through the date this report was issued, and the following subsequent events took place. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). |
Principles of Consolidation | Principles of Consolidation The Company evaluates the need to consolidate affiliates based on standards set forth in ASC 810 Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and its subsidiaries, Piezo Motion Corp, Discovery Technology International, Inc., MemoryMD, Inc., MemoryMD – Russia and MemoryMD - Europe. All significant consolidated transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the useful life of property and equipment and assumptions used in the valuation of options, warrants and derivative liabilities. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents. At September 30, 2022 and December 31, 2021, the Company had no cash equivalents. The Company’s cash is held with financial institutions, and the account balances may, at times, exceed the Federal Deposit Insurance Corporation (FDIC) insurance limit. Accounts are insured by the FDIC up to $250,000 per financial institution. The Company has not experienced any losses in such accounts with these financial institutions. As of September 30, 2022, and December 31, 2021, the Company had $1,621,012 and $277,989, respectively, in excess over the FDIC insurance limit. |
Inventory | I nventory Inventory consists of raw material, works in progress and finished goods that are valued at lower of cost or market using the weighted average method. |
Property and Equipment | Property and Equipment Property, plant and equipment are carried at cost. Depreciation is provided on the straight-line method over the assets estimated service lives. Expenditures for maintenance and repairs are charged to expense in the period in which they are incurred, and betterments are capitalized. The cost of assets sold or abandoned and the related accumulated depreciation are eliminated from the accounts and any gains or losses are reflected in the accompanying statements of operations of the respective period. The estimated useful lives range from 3 to 7 years. |
Intangible assets, net | Intangible assets, net Intangible assets are measured at cost less accumulated amortization and impairment losses, if any. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which do not exceed the contractual period, if any. The estimated useful lives, residual values, and amortization methods are reviewed at each year end, and any changes in estimates are accounted for prospectively. Patents 15 years Licenses and trademarks 9 years Amortization expense is included in the consolidated income statement within general and administrative expenses. The asset is tested annually and during interim periods for impairment if there is a trigger for impairment. |
Goodwill | Goodwill Goodwill represents the excess of the consideration transferred over the fair value of the net identifiable assets acquired. Goodwill is evaluated for impairment annually or whenever we identify certain triggering events or circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Events or circumstances that might indicate an interim evaluation is warranted include, among other things, unexpected adverse business conditions, macro and reporting unit specific economic factors (for example, interest rate and foreign exchange rate fluctuations, and loss of key personnel), supply costs, unanticipated competitive activities, and acts by governments and courts. |
Convertible Notes Payable | Convertible Notes Payable The Company has issued convertible notes, which contain variable conversion features, whereby the outstanding principal and accrued interest automatically convert into common shares at a fixed price which may be at a discount to the common stock at the time of conversion. For certain notes, the conversion features are contingent upon future events, whereby, the holder agreed not to convert until the contingent future event has occurred. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, (“ASC 606”). The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the Company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). The Company has determined that product delivery is the primary performance obligation, and as such recognizes revenues upon delivery to the customer. If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Noncash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. The Company recognizes revenue from the sale of NeuroCaps, as well as revenue from the sale of goods purchased through manufacturers of medical devices. Primarily all revenues for the nine months ended September 30, 2022 are from the sale of medical devices purchased from Neurotech. Revenues for the nine months ended September 30, 2021 of $14,482 related to the sales of Piezo evaluation kits. |
Research and Development Costs | Research and Development Costs The Company expenses all research and development costs as they are incurred. Research and development includes expenditures in connection with in-house research and development salaries and staff costs, application and filing for regulatory approval of proposed products, regulatory and scientific consulting fees, as well as contract research, data collection, and monitoring, related to the research and development of the cloud infrastructure, data imaging, and proprietary products and technology. Research and development costs recognized in the statement of operations for the three and nine months ended September 30, 2022 were $56,684 and $224,405, respectively. Research and development costs recognized in the statement of operations for the three and nine months ended September 30, 2021 were $48,282 and $147,324, respectively. |
Sales and Marketing | Sales and Marketing Advertising and marketing costs are expensed as incurred. Advertising and marketing costs recognized in the statement of operations for the three and nine months ended September 30, 2022 were $165,414 and $570,666, respectively. Advertising and marketing costs recognized in the statement of operations for the three and nine months ended September 30, 2021 were $260,832 and $498,583, respectively. |
Stock-based Compensation | Stock-based Compensation The Company measures and recognizes compensation expense for all stock-based payments at fair value over the requisite service period. The Company uses the Black-Scholes option pricing model to determine the weighted average fair value of options and warrants. Equity-based compensation expense is recorded in administrative expenses based on the classification of the employee or vendor. The determination of fair value of stock-based payment awards on the date of grant using an option-pricing model is affected by our stock price as well as by assumptions regarding a number of subjective variables. These variables include, but are not limited to, the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share Basic net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period and, if dilutive, potential common shares outstanding during the period. Potentially dilutive securities consist of the incremental common shares issuable upon exercise of common stock equivalents such as stock options, warrants and convertible debt instruments. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive. As a result, the basic and diluted per share amounts for all periods presented are identical. In the three months ended September 30, 2022 and 2021, 159,239,497, and 0 anti-dilutive securities were excluded from the computation, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments are measured and recorded at fair value based on inputs and assumptions that market participants would use in pricing an asset or a liability. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, management considers the principal or most advantageous market in which the Company would transact, and also considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance. Fair value is determined for assets and liabilities using a three-tiered value hierarchy into which these assets and liabilities are grouped based upon significant inputs as follows: ● Level 1 - Quoted prices in active markets for identical assets or liabilities. ● Level 2 - Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, 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. ● Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. When a determination is made to classify a financial instrument within Level 3, the determination is based upon the lack of significance of the observable parameters to the overall fair value measurement. However, the fair value determination for Level 3 financial instruments may consider some observable market inputs. The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The carrying values of cash, prepaid expenses and other current assets, convertible notes, accounts payable, loans payable and due to others approximate fair value due to the short-term nature of these items. As of September 30, 2022, the Company had a Level 3 financial instrument related to the derivative liabilities related to the issuance of convertible debt and warrants. The Company did not have any other Level 1, Level 2 or Level 3 assets or liabilities as of December 31, 2021. |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial liabilities measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheet as of September 30, 2022. Liabilities Amounts Level 1 Level 2 Level 3 Derivative liability – conversion feature $ 1,159,000 $ - $ - $ 1,159,000 Derivative liability – warrants 698,351 - - 698,351 Total $ 1,857,351 $ - $ - $ 1,857,351 |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset-and-liability method in accordance with ASC Topic 740, “Income Taxes”. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on the deferred tax assets and liabilities of a change in tax rate is recognized in the period that includes the enactment date. A valuation allowance is recorded if it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized in future periods. The Company follows the guidance in ASC Topic 740-10 in assessing uncertain tax positions. The standard applies to all tax positions and clarifies the recognition of tax benefits in the financial statements by providing for a two-step approach of recognition and measurement. The first step involves assessing whether the tax position is more-likely-than-not to be sustained upon examination based upon its technical merits. The second step involves measurement of the amount to be recognized. Tax positions that meet the more-likely-than-not threshold are measured at the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate finalization with the taxing authority. The Company recognizes the impact of an uncertain income tax position in the financial statements if it believes that the position is more likely than not to be sustained by the relevant taxing authority. The Company will recognize interest and penalties related to tax positions in income tax expense. As of September 30, 2022, and December 31, 2021, the Company had no unrecognized uncertain income tax positions. |
Reclassification | Reclassification Certain prior period balances have been reclassified to conform to current year presentation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standard Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed, the Company does not believe that the impact of recently issued standards that are not yet effective will have a material impact on the Company’s financial position or results of operations upon adoption. |
Organization and Nature of Op_2
Organization and Nature of Operations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Nature of Operations [Abstract] | |
Schedule of purchase price of the acquisition | Allocation Tangible Assets Acquired: Net working capital $ (1,186,622 ) Right of use asset 40,093 Lease liability (46,970 ) Net Tangible Assets Acquired $ (1,193,499 ) Intangible Assets Acquired: Licenses and trademarks Brain Scientific Trade Name 133,000 MemoryMD Trade Name 504,000 Neurocap Trade Name 188,000 Neuro EEG Trade Name 11,000 Patent products NeuroCap Developed Technology 10,242,000 NeuroEEG Developed Technology 35,000 Net Intangible Assets Acquired $ 11,113,000 Total Fair Value of Assets Acquired $ 9,919,501 Consideration: Fair value of equity received 7,240,222 Liabilities assumed 2,987,152 Loans forgiven 605,311 Total consideration $ 10,832,685 Goodwill $ 913,184 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of straight-line basis over their estimated useful lives | Patents 15 years Licenses and trademarks 9 years |
Schedule of fair value on a recurring basis | Liabilities Amounts Level 1 Level 2 Level 3 Derivative liability – conversion feature $ 1,159,000 $ - $ - $ 1,159,000 Derivative liability – warrants 698,351 - - 698,351 Total $ 1,857,351 $ - $ - $ 1,857,351 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | September 30, December 31, Raw materials $ 76,379 $ 93,190 Works in progress 11,911 11,857 Finished goods 37,842 41,043 Total $ 126,132 $ 146,090 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Prepaid Expenses And Other Current Assets [Abstract] | |
Schedule of prepaid expenses and other current assets | September 30, December 31, Prepaid insurance $ 145,734 $ 105,900 Prepaid production costs 119,331 - Other prepaid expenses 11,352 46,170 Lease deposits 14,378 14,378 Other assets - 10 Total $ 290,795 $ 166,458 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment, net | September 30, December 31, Machinery and equipment $ 204,143 $ 176,678 Leasehold improvements 12,283 12,283 216,426 188,961 Less: Accumulated depreciation (91,686 ) (65,982 ) Total $ 124,740 $ 122,979 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of acquired intangible assets | September 30, December 31, Average Patent products $ 10,277,000 $ 10,277,000 15.4 Licenses and trademarks 836,000 836,000 9 Intangible assets $ 11,113,000 $ 11,113,000 Less: Accumulated amortization (769,462 ) (192,423 ) Total $ 10,343,538 $ 10,920,577 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of accounts payable | September 30, December 31, Trade payables $ 1,143,649 $ 1,101,028 Accrued payroll and related expenses 1,380,194 1,593,925 Accrued expenses 122,311 255,820 Customer deposits 6,882 36,491 Total $ 2,653,036 $ 2,987,264 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of conversion feature derivative valuations | Inception September 30, Common stock price $ 0.30 $ 0.12 Exercise price $ 0.33-0.36 0.33-0.36 Expected volatility 100.0 % 92.0-100.0 % Risk free rate 2.3-3.0 % 3.3-4.0 % Expected dividend yield 0 % 0 % Expected term (years) 0.55-1.25 0.25-0.95 Discount rate 37.7 % 37.7 % PV factor 0.67-0.84 0.80 |
Schedule of warrant derivative valuations | Inception September 30, Common stock price $ 0.30 $ 0.12 Expected volatility 100.0 % 98.0 % Expected term (years) 6.05 5.5 Risk free rate 3.5 % 4.0 % Expected dividend yield 0 % 0 % |
Schedule of derivative liabilities | Conversion Feature Warrants Total Balance at December 31, 2021 - - - Issuance – June 13, 2022 $ 1,610,000 $ 1,622,399 $ 3,232,399 Movement in fair value (451,000 ) (924,048 ) (1,375,048 ) Balance at September 30, 2022 $ 1,159,000 $ 698,351 $ 1,857,351 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Schedule of operating maturity of lease liability | Maturity of operating lease liabilities for the following fiscal years: 2022 $ 21,491 2023 88,325 2024 7,378 Total undiscounted finance lease payments 117,194 Less: Imputed interest (7,032 ) Present value of finance lease liabilities $ 110,162 |
Schedule of supplemental balance sheet information related to the lease | Operating lease right-of-use asset $ 107,617 Lease liability, current portion 81,012 Lease liability, long-term 29,150 Total operating lease liability $ 110,162 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity Note [Abstract] | |
Schedule of warrant activity | Number of Weighted Weighted Aggregate Warrants Shares Price Term Value Balance Outstanding, December 31, 2021 9,258,191 $ 0.45 6.85 $ 304,799 Granted 20,912,119 0.09 5.20 - Forfeited (47,059 ) Exercised Expired Balance Outstanding, September 30, 2022 30,123,251 $ 0.20 5.45 - Exercisable, September 30, 2022 7,711,132 $ 0.38 6.83 - |
Schedule of option activity | Number of Weighted Weighted Aggregate Options Shares Price Term Value Balance Outstanding, December 31, 2021 11,753,422 $ 0.36 9.47 $ 196,825 Granted 26,874,270 0.13 5.00 - Forfeited (476,190 ) 0.21 9.20 - Exercised - - - - Expired - - - - Balance Outstanding, September 30, 2022 38,151,502 $ 0.20 6.15 - Exercisable, September 30, 2022 35,344,654 $ 0.20 5.98 - |
Organization and Nature of Op_3
Organization and Nature of Operations (Details) - shares | Sep. 30, 2022 | Jun. 11, 2021 |
Organization and Nature of Operations (Textual) | ||
Shares of common stock | 29,520,454 | |
Common stock shares issued | 2.93 |
Organization and Nature of Op_4
Organization and Nature of Operations (Details) - Schedule of purchase price of the acquisition - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Consideration: | ||
Fair value of equity received | $ 7,240,222 | |
Liabilities assumed | 2,987,152 | |
Loans forgiven | 605,311 | |
Total consideration | 10,832,685 | |
Goodwill | 913,184 | $ 913,184 |
Merger Agreement [Member] | ||
Tangible Assets Acquired: | ||
Net Tangible Assets Acquired | (1,193,499) | |
Licenses and trademarks | ||
Net Intangible Assets Acquired | 11,113,000 | |
Patent products | ||
Total Fair Value of Assets Acquired | 9,919,501 | |
Net working capital [Member] | Merger Agreement [Member] | ||
Tangible Assets Acquired: | ||
Net Tangible Assets Acquired | (1,186,622) | |
Right of Use Asset [Member] | Merger Agreement [Member] | ||
Tangible Assets Acquired: | ||
Net Tangible Assets Acquired | 40,093 | |
Lease Liability [Member] | Merger Agreement [Member] | ||
Tangible Assets Acquired: | ||
Net Tangible Assets Acquired | (46,970) | |
Brain Scientific Trade Name [Member] | Merger Agreement [Member] | ||
Licenses and trademarks | ||
Net Intangible Assets Acquired | 133,000 | |
MemoryMD Trade Name [Member] | Merger Agreement [Member] | ||
Licenses and trademarks | ||
Net Intangible Assets Acquired | 504,000 | |
Neurocap Trade Name [Member] | Merger Agreement [Member] | ||
Licenses and trademarks | ||
Net Intangible Assets Acquired | 188,000 | |
Neuro EEG Trade Name [Member] | Merger Agreement [Member] | ||
Licenses and trademarks | ||
Net Intangible Assets Acquired | 11,000 | |
NeuroEEG Developed Technology [Member] | Merger Agreement [Member] | ||
Licenses and trademarks | ||
Net Intangible Assets Acquired | 35,000 | |
NeuroCap Developed Technology [Member] | Merger Agreement [Member] | ||
Licenses and trademarks | ||
Net Intangible Assets Acquired | $ 10,242,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies (Textual) | |||||
Cash, FDIC insured amount | $ 250,000 | $ 250,000 | |||
Excess cash | 1,621,012 | 1,621,012 | $ 277,989 | ||
Revenues | 11,432 | $ 5,275 | 209,484 | $ 14,482 | |
Research and development costs | 56,684 | 48,282 | 224,405 | 147,324 | |
Advertising and marketing costs | $ 165,414 | $ 260,832 | $ 570,666 | $ 498,583 | |
Anti-dilutive securities shares (in Shares) | 159,239,497 | 0 | |||
Income tax benefit, percentage | 50% | ||||
Minimum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Estimated useful lives | 3 years | ||||
Maximum [Member] | |||||
Summary of Significant Accounting Policies (Textual) | |||||
Estimated useful lives | 7 years |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of straight-line basis over their estimated useful lives | 9 Months Ended |
Sep. 30, 2022 | |
Schedule Of Straight Line Basis Over Their Estimated Useful Lives Abstract | |
Patents | 15 years |
Licenses and trademarks | 9 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of fair value on a recurring basis | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability – conversion feature | $ 1,159,000 |
Derivative liability – warrants | 698,351 |
Total | 1,857,351 |
Level 1 [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability – conversion feature | |
Derivative liability – warrants | |
Total | |
Level 2 [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability – conversion feature | |
Derivative liability – warrants | |
Total | |
Level 3 [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Derivative liability – conversion feature | 1,159,000 |
Derivative liability – warrants | 698,351 |
Total | $ 1,857,351 |
Going Concern (Details)
Going Concern (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Going Concern [Abstract] | |
Revenues | $ 209,484 |
Net loss | 9,110,360 |
Net cash used in operations | 4,691,693 |
Working capital deficit | 31,389,283 |
Stockholders deficit | $ 4,353,257 |
Inventory (Details) - Schedule
Inventory (Details) - Schedule of inventory - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Inventory Abstract | ||
Raw materials | $ 76,379 | $ 93,190 |
Parts | 11,911 | 11,857 |
Finished goods | 37,842 | 41,043 |
Total | $ 126,132 | $ 146,090 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Prepaid Expenses And Other Current Assets [Abstract] | ||
Long term prepaid insurance | $ 80,000 | $ 95,000 |
Prepaid Expenses and Other Cu_4
Prepaid Expenses and Other Current Assets (Details) - Schedule of prepaid expenses and other current assets - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Prepaid Expenses And Other Current Assets [Abstract] | ||
Prepaid insurance | $ 145,734 | $ 105,900 |
Prepaid production costs | 119,331 | |
Other prepaid expenses | 11,352 | 46,170 |
Lease deposits | 14,378 | 14,378 |
Other assets | 10 | |
Total | $ 290,795 | $ 166,458 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 8,635 | $ 7,538 | $ 25,704 | $ 19,376 |
Property and Equipment (Detai_2
Property and Equipment (Details) - Schedule of property and equipment, net - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 216,426 | $ 188,961 |
Less: Accumulated depreciation | (91,686) | (65,982) |
Property and Equipment, net | 124,740 | 122,979 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | 204,143 | 176,678 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and Equipment | $ 12,283 | $ 12,283 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of Intangible Assets | $ 577,039 | $ 192,365 |
Intangible Assets, Net (Detai_2
Intangible Assets, Net (Details) - Schedule of acquired intangible assets - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 11,113,000 | $ 11,113,000 |
Average Estimated Life | 9 years | |
Less: Accumulated depreciation | $ (769,462) | (192,423) |
Total | 10,343,538 | 10,920,577 |
Patent products [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 10,277,000 | 10,277,000 |
Patent products [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average Estimated Life | 15 years 4 months 24 days | |
Licenses and trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 836,000 | $ 836,000 |
Licenses and trademarks [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Average Estimated Life | 9 years |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Expenses (Details) - Schedule of accounts payable - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Accounts Payable Abstract | ||
Trade payables | $ 1,143,649 | $ 1,101,028 |
Accrued payroll and related expenses | 1,380,194 | 1,593,925 |
Accrued expenses | 122,311 | 255,820 |
Customer deposits | 6,882 | 36,491 |
Total | $ 2,653,036 | $ 2,987,264 |
Accounts Payable and Accrued _5
Accounts Payable and Accrued Expenses – Related Party (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounts Payable And Accrued Expenses Related Party [Abstract] | ||
Accrued director’s fees amount | $ 75,000 | $ 75,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 13, 2022 | Apr. 20, 2022 shares | Dec. 30, 2021 | Dec. 21, 2021 USD ($) | Apr. 21, 2020 USD ($) $ / shares shares | Dec. 31, 2019 USD ($) shares | Sep. 30, 2022 USD ($) $ / shares $ / item | Sep. 30, 2022 USD ($) $ / shares $ / item shares | Dec. 31, 2021 USD ($) | Dec. 28, 2021 USD ($) | |
Convertible Notes Payable (Details) [Line Items] | ||||||||||
Converted notes | $ 250,000 | |||||||||
Accrued interest | 33,000 | |||||||||
Agreement paid | $ 30,000 | 30,000 | $ 33,600 | |||||||
Principal balance | 90,000 | |||||||||
Accrued interest | 33,000 | 33,000 | $ 4,328,407 | |||||||
Paid principal amount | 30,000 | |||||||||
Balance amount | $ 90,000 | $ 90,000 | ||||||||
Conversion price (in Dollars per share) | $ / shares | $ 0.28 | $ 0.28 | ||||||||
Price per share percentage | 80% | |||||||||
Ownership limitation percentage | 9.99% | |||||||||
Outstanding balance percentage | 130% | |||||||||
Lowest trade | 65% | |||||||||
Exercise price (in Dollars per Item) | $ / item | 1.25 | 1.25 | ||||||||
Warrant term | 5 years | |||||||||
Principle amount | $ 125,000 | |||||||||
Warrant purchase shares (in Shares) | shares | 750,000 | |||||||||
Securities purchase agreement description | the Company consummated the first closing of a private placement offering whereby the Company entered into a Securities Purchase Agreement (SPA), dated as of June 13, 2022 with thirteen accredited investors, pursuant to which the investors purchased from the Company, for an aggregate purchase price of $5,110,000, (i) 10% Original Issue Discount Senior Secured Convertible Debentures (the “2022 Notes”), in the principal amount of $5,659,500 and (ii) 18,896,493 warrants to purchase shares of common stock of the Company at the same price as the debt conversion price. In addition, 2,015,626 warrants were issued to the book-runner of this offering (together with the 18,896,493 investor warrants – the “2022 warrants”). The 2022 Notes mature on June 13, 2023 and bear interest at an annual rate of 10%. | |||||||||
Debt discount (in Shares) | shares | 4,470,289 | |||||||||
Interest expense | $ 553,200 | $ 633,312 | ||||||||
Discount amount | 3,836,977 | 3,836,977 | ||||||||
Gross proceeds | $ 5,000,000 | |||||||||
Per share (in Dollars per share) | $ / shares | $ 0.25 | |||||||||
Voluntary conversion percentage | 75% | |||||||||
Original investment amount | 10% | |||||||||
Debt assumed | 1,540,508 | |||||||||
Investor amount | 2,950,000 | |||||||||
Proceeds | 2,850,000 | |||||||||
Dept discount | $ 83,364 | |||||||||
Warrant share amount description | Each holder of the 2021 Notes, provided that the note is still then outstanding, will be issued, on the earlier of (i) the date, if any, upon which the Company’s common stock is listed for trading on the NASDAQ stock exchange (the “Uplist”), and (ii) the date that is eighteen months from the date of issuance, a warrant to purchase an amount of shares of the Company’s common stock, equal to such holder’s Warrant Share Amount. For purposes of the foregoing, a holder’s “Warrant Share Amount” means (i) if such Warrant is issued in connection with the Uplist, one half of the initial principal balance of such Holder’s Note at issuance divided by the lesser of (A) $0.40, and (B) and the greater of (x) $0.20 and (y) one hundred twenty percent (120%) of the closing price for the Company’s common stock on the trading day prior to the date of the Uplist, and (ii) if such Warrant is issued otherwise than in connection with the Uplist, the initial principal balance of such Holder’s Note, divided by the lesser of (A) $0.40, and (B) and the greater of (x) $0.20 and (y) one hundred twenty percent (120%) of the volume weighted average price (“VWAP”) for the Company’s common stock over the five consecutive trading days immediately preceding the date that is eighteen months from the date of issuance. The 2021 Notes contain mandatory and voluntary conversion features as detailed in the agreement. | |||||||||
Principal amount | $ 900,000 | $ 2,000,000 | ||||||||
Notes principal outstanding | $ 9,718,915 | |||||||||
Accrued interest percentage | 10% | |||||||||
Original investment amount | 50% | |||||||||
Warrants term | 4 years | |||||||||
Warrants | $ 0.25 | |||||||||
Common Stock [Member] | ||||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||||
Ownership limitation percentage | 4.99% | |||||||||
Shares issued (in Shares) | shares | 287,282 | |||||||||
Assumed convertible debt [Member] | ||||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||||
Outstanding convertible debt | $ 891,133 | $ 891,133 | ||||||||
Convertable notes payable amount paid | $ 574,133 | |||||||||
Increasing debt | 20,000 | |||||||||
Convertible debt | 337,000 | |||||||||
2019 Note [Member] | ||||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||||
Original principal amount | $ 275,000 | |||||||||
Purchase of common stock (in Shares) | shares | 100,000 | |||||||||
Interest charged percentage | 8% | |||||||||
Convertible notes payable, description | the Company signed an allonge amending the Note extending the maturity date to April 30, 2022 and amending the outstanding balance and payment schedule to provide for two equal payments of $60,000 on March 31, 2022 and April 30, 2022. On March 31, 2022 the Company signed an allonge amending the Note, extending the maturity date to December 31, 2022 and amended the outstanding balance and payment schedule to provide for seven monthly payments of $10,000 plus interest at the rate of 14% per annum. The first monthly payment is payable on June 30, 2022. A final payment of $50,000 plus interest is due upon maturity. | |||||||||
Convertible Grid Notes [Member] | ||||||||||
Convertible Notes Payable (Details) [Line Items] | ||||||||||
Principle amount | $ 125,000 | |||||||||
Warrant purchase shares (in Shares) | shares | 750,000 | |||||||||
Exercise price (in Dollars per share) | $ / shares | $ 0.8 | |||||||||
Warrant exercise price per share (in Dollars per share) | $ / shares | $ 0.8 | |||||||||
Debt interest rate | 12% | |||||||||
Outstanding principal balance | 250,000 | |||||||||
Accrued interest | $ 28,032 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative liabilities conversion feature | $ 1,159,000 |
Fair value of derivative liabilities of warrants | $ 698,351 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Details) - Schedule of conversion feature derivative valuations - $ / shares | 9 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Derivative Financial Instruments (Details) - Schedule of conversion feature derivative valuations [Line Items] | ||
Common stock price (in Dollars per share) | $ 0.3 | $ 0.12 |
Expected volatility | 100% | 98% |
Risk free rate | 3.50% | 4% |
Expected dividend yield | 0% | 0% |
Expected term (years) | 6 years 18 days | 5 years 6 months |
Discount rate | 37.70% | 37.70% |
PV factor (in Dollars per share) | $ 0.8 | |
Minimum [Member] | ||
Derivative Financial Instruments (Details) - Schedule of conversion feature derivative valuations [Line Items] | ||
Exercise price (in Dollars per share) | $ 0.33 | $ 0.33 |
Expected volatility | 92% | |
Risk free rate | 2.30% | 3.30% |
Expected term (years) | 6 months 18 days | 3 months |
PV factor (in Dollars per share) | $ 0.67 | |
Maximum [Member] | ||
Derivative Financial Instruments (Details) - Schedule of conversion feature derivative valuations [Line Items] | ||
Exercise price (in Dollars per share) | $ 0.36 | $ 0.36 |
Expected volatility | 100% | |
Risk free rate | 3% | 4% |
Expected term (years) | 1 year 3 months | 11 months 12 days |
PV factor (in Dollars per share) | $ 0.84 |
Derivative Financial Instrume_5
Derivative Financial Instruments (Details) - Schedule of warrant derivative valuations - $ / shares | 9 Months Ended | |
Dec. 31, 2022 | Sep. 30, 2022 | |
Schedule of Warrant Derivative Valuations [Abstract] | ||
Common stock price (in Dollars per share) | $ 0.3 | $ 0.12 |
Expected volatility | 100% | 98% |
Expected term (years) | 6 years 18 days | 5 years 6 months |
Risk free rate | 3.50% | 4% |
Expected dividend yield | 0% | 0% |
Derivative Financial Instrume_6
Derivative Financial Instruments (Details) - Schedule of derivative liabilities | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Derivative Financial Instruments (Details) - Schedule of derivative liabilities [Line Items] | |
Balance at December 31, 2021 | |
Issuance – June 13, 2022 | 3,232,399 |
Movement in fair value | (1,375,048) |
Balance at September 30, 2022 | 1,857,351 |
Conversion Feature [Member] | |
Derivative Financial Instruments (Details) - Schedule of derivative liabilities [Line Items] | |
Balance at December 31, 2021 | |
Issuance – June 13, 2022 | 1,610,000 |
Movement in fair value | (451,000) |
Balance at September 30, 2022 | 1,159,000 |
Warrants [Member] | |
Derivative Financial Instruments (Details) - Schedule of derivative liabilities [Line Items] | |
Balance at December 31, 2021 | |
Issuance – June 13, 2022 | 1,622,399 |
Movement in fair value | (924,048) |
Balance at September 30, 2022 | $ 698,351 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | 1 Months Ended | |||||
Dec. 28, 2021 | Dec. 28, 2020 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Notes Payable (Details) [Line Items] | ||||||
Interest payment term | 1 year | |||||
Installment amount | $ 56,000 | |||||
Debt instrument amount | $ 300,000 | |||||
Interest payment amount | $ 33,600 | $ 30,000 | ||||
Aggregate payment | $ 184,800 | |||||
Exercise price (in Dollars per share) | $ 0.3 | $ 0.12 | ||||
Warrant [Member] | ||||||
Notes Payable (Details) [Line Items] | ||||||
Exercise price (in Dollars per share) | $ 1.2 | |||||
Securities Purchase Agreement [Member] | ||||||
Notes Payable (Details) [Line Items] | ||||||
Aggregate purchase payment | $ 300,000 | $ 265,000 | ||||
Purchase of aggregate shares (in Shares) | 500,000 | |||||
Additional commitment fee | $ 250,000 | |||||
Fixed interest rate | 12% | |||||
Securities Purchase Agreement [Member] | Warrant [Member] | ||||||
Notes Payable (Details) [Line Items] | ||||||
Purchase of aggregate shares (in Shares) | 250,000 |
Notes Payable _ Related Party (
Notes Payable – Related Party (Details) | 9 Months Ended | |||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 RUB (₽) | Oct. 01, 2022 USD ($) | Aug. 01, 2022 USD ($) | May 31, 2022 USD ($) | Mar. 31, 2022 USD ($) | Mar. 09, 2022 | Oct. 01, 2021 USD ($) | |
Notes Payable – Related Party [Abstract] | ||||||||
Related party loans | $ 155,530 | |||||||
Interest rate | 9% | |||||||
Accrued interest | $ 53,000 | |||||||
Payment of accrued interest | $ 49,000 | |||||||
Debt instrument payment | $ 49,000 | $ 53,000 | ||||||
Repaid outstanding principal | $ 106,000 | |||||||
Prepaid principal due | 1,598 | |||||||
Prepaid principal due balance | 47,402 | |||||||
Outstanding loan | $ 596 | ₽ 34,400 |
Leases (Details)
Leases (Details) - USD ($) | 9 Months Ended | ||
Jan. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases (Details) [Line Items] | |||
Finance lease, description | The term of the lease is for a period of two years commencing on February 1, 2021 and ending on February 1, 2023. The rent is $6,530 per month for year 1, $6,726 per month for year 2 and $6,928 per month for year 3. The Company will account for the lease under ASC 842 whereby the operating lease right-of-use assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. | ||
Lease terms of office space | 2 years | ||
Lease amount | $ 1,660 | ||
Weighted-average remaining lease term | 1 year 4 months 24 days | ||
Weighted-average remaining discount rate | 10% | ||
Operating lease right of use assets | $ 107,617 | ||
General and administrative expenses [Member] | |||
Leases (Details) [Line Items] | |||
Operating leases expenses | $ 64,490 | $ 0 |
Leases (Details) - Schedule of
Leases (Details) - Schedule of operating maturity of lease liability | Sep. 30, 2022 USD ($) |
Schedule Of Operating Maturity Of Lease Liability Abstract | |
2022 | $ 21,491 |
2023 | 88,325 |
2024 | 7,378 |
Total undiscounted finance lease payments | 117,194 |
Less: Imputed interest | (7,032) |
Present value of finance lease liabilities | $ 110,162 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of supplemental balance sheet information related to the lease - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule Of Supplemental Balance Sheet Information Related To The Lease Abstract | ||
Operating lease right-of-use asset | $ 107,617 | $ 191,702 |
Lease liability, current portion | 81,012 | |
Lease liability, long-term | 29,150 | $ 91,089 |
Total operating lease liability | $ 110,162 |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||
Dec. 10, 2021 | Nov. 15, 2021 | Oct. 21, 2021 | Oct. 01, 2021 | Sep. 21, 2018 | Aug. 19, 2022 | May 19, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Jan. 31, 2022 | Dec. 31, 2021 | |
Stockholders' Deficit (Textual) | |||||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||||||||
Common stock, shares authorized | 200,000,000 | 200,000,000 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | |||||||||
Voting rights | one | ||||||||||
Common stock converted shares | 54,823,855 | ||||||||||
Shares issued | 360,695 | ||||||||||
Outstanding payables | $ 129,850 | ||||||||||
Equity incentive plan, description | The vesting period, term and exercise price will be determined at the time of the grant. An aggregate of up to 3,500,000 of the Company’s common stock was reserved for issuance under the 2018 Plan. On July 15, 2021 the Company’s board of directors increased the number of shares of common stock authorized for grant from 3,500,000 to 8,000,000. As of September 30, 2022, the Company has granted and has 7,859,147 options outstanding, as well as 107,876 shares of restricted common stock issued under the 2018 Plan. | ||||||||||
Purchase aggregate, description | the Board of Directors approved the issuance of options to purchase an aggregate of 2,718,247 shares of common stock to certain employees of the Company. The options have an exercise price of $0.21 per share with vesting terms of one quarter vesting on June 10, 2022 and the remainder monthly ratably through December 10, 2023. The options will expire on December 11, 2031. The aggregate fair value of $472,975 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 116.90%, (iii) risk free rate of 1.26% (iv) dividend rate of zero, (v) stock price of $0.21, and (vi) exercise price of $0.21. These options were amended on December 30, 2021 adjusting the vesting schedule to vest equally at the end of each quarter in 2022. As the share price had increased on the amendment date, the amendment resulted in an increase to the aggregate fair value of $111,166. The increased fair value along with the unamortized portion of the original fair value will be amortized over the amended vesting schedule. A total of $26,574 was recorded during the year ended December 31, 2021. | the Board of Directors approved the issuance of options to purchase an aggregate of 1,448,276 shares of common stock to the directors of the Company. The options have an exercise price of $0.29 per share and vest per days in service as members of the board of directors during the quarter, at the end of the quarter with the final quarterly vesting quarter end of December 31, 2022. The options will expire on December 11, 2031. The aggregate fair value of $341,793 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5.04 years, (ii) volatility of 115.8%, (iii) risk free rate of 1.25% (iv) dividend rate of zero, (v) stock price of $0.29, and (vi) exercise price of $0.29. The expense will be amortized over the vesting period and a total of $28,254 was recorded during the year ended December 31, 2021. | the Board of Directors approved the issuance of options to purchase an aggregate of 1,218,248 shares of common stock to the CEO. The options have an exercise price of $0.39 per share with vesting terms of 304,562 vesting on April 21, 2022 and the remainder monthly ratably through October 21, 2023. The options will expire on October 21, 2031. The aggregate fair value of $372,384 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 4.65 years, (ii) volatility of 113.90%, (iii) risk free rate of 1.22% (iv) dividend rate of zero, (v) stock price of $0.39, and (vi) exercise price of $0.39. These options were amended on December 10, 2021 and December 30, 2021 adjusting the exercise price to $0.21 and the vesting schedule to vest equally at the end of each quarter in 2022. The expense will be amortized over the amended vesting period and a total of $36,667 was recorded during the year ended December 31, 2021. | the Board of Directors approved the issuance of options to purchase an aggregate of 4,504,214 shares of common stock to an executive and a director. The options have an exercise price of $0.35 per share and vested immediately upon issuance. The options will expire on October 1, 2031. The aggregate fair value of $1,270,188 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life 5years, (ii) volatility of 115%, (iii) risk free rate of 0.93% (iv) dividend rate of zero, (v) stock price of $0.35, and (vi) exercise price of $0.35. The expense of 1,270,188 was recorded in full upon issuance. | the Board of Directors approved the issuance of options to purchase an aggregate of 25,788,141 shares of common stock to certain employees of the Company. The options have an exercise price of $0.12 per share with varying vesting terms through August 10, 2023. The options will expire on August 19, 2027. The aggregate fair value of $2,346,000 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 100.0%, (iii) risk free rate of 3.10% (iv) dividend rate of zero, (v) stock price of $0.12, and (vi) exercise price of $0.12. The expense will be amortized over the vesting period and a total of $2,277,618 was recorded since issuance and through September 30, 2022. | the Board of Directors approved the issuance of options to purchase an aggregate of 1,086,129 shares of common stock to certain employees of the Company. The options have an exercise price of $0.31 per share with vesting terms of one quarter/half vesting on November 19, 2022 and the remainder monthly ratably through May 19, 2023. The options will expire on May 19, 2032. The aggregate fair value of $271,324 was calculated using the Black-Scholes pricing model with the following assumptions: (i) expected life of 5 years, (ii) volatility of 115.0%, (iii) risk free rate of 2.80% (iv) dividend rate of zero, (v) stock price of $0.31, and (vi) exercise price of $0.31. The expense will be amortized over the vesting period and a total of $31,184 was recorded since issuance and through June 30, 2022. | |||||
Stock option remaining value | $ 513,807 | ||||||||||
Common Stock [Member] | |||||||||||
Stockholders' Deficit (Textual) | |||||||||||
Shares outstanding | 105,401,858 |
Stockholders' Deficit (Detail_2
Stockholders' Deficit (Details) - Schedule of warrant activity - Warrant [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Warrants Number of Shares outstanding at beginning balance | 9,258,191 |
Warrants Weighted Average Exercise Price outstanding at beginning balance (in Dollars per share) | $ / shares | $ 0.45 |
Warrants Weighted Average Remaining Contractual Term outstanding at beginning balance | 6 years 10 months 6 days |
Warrants Warrant Aggregate Intrinsic Value outstanding at beginning (in Dollars) | $ | $ 304,799 |
Granted Number of Shares | 20,912,119 |
Granted Weighted Average Exercise Price (in Dollars per share) | $ / shares | $ 0.09 |
Granted Weighted Average Remaining Contractual Term | 5 years 2 months 12 days |
Granted Aggregate Intrinsic Value (in Dollars) | $ | |
Forfeited Number of Shares | (47,059) |
Warrants Number of Shares outstanding at ending balance | 30,123,251 |
Warrants Weighted Average Exercise Price outstanding at ending balance (in Dollars per share) | $ / shares | $ 0.2 |
Warrants Weighted Average Remaining Contractual Term outstanding at ending balance | 5 years 5 months 12 days |
Warrants Warrant Aggregate Intrinsic Value outstanding at ending (in Dollars) | $ | |
Warrants Number of Shares exercisable at ending | 7,711,132 |
Warrants Weighted Average Exercise Price exercisable at ending (in Dollars per share) | $ / shares | $ 0.38 |
Warrants Weighted Average Remaining Contractual Term exercisable at ending | 6 years 9 months 29 days |
Warrants Warrant Aggregate Intrinsic Value exercisable at ending (in Dollars) | $ |
Stockholders' Deficit (Detail_3
Stockholders' Deficit (Details) - Schedule of option activity - Options [Member] | 9 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Stockholders' Deficit (Details) - Schedule of option activity [Line Items] | |
Option Number of Shares outstanding at beginning | shares | 11,753,422 |
Option Weighted Average Exercise Price outstanding | $ / shares | $ 0.36 |
Option Weighted Average Remaining Contractual Term outstanding at beginning | 9 years 5 months 19 days |
Option Aggregate Intrinsic Value outstanding at beginning | $ | $ 196,825 |
Granted Number of Shares | shares | 26,874,270 |
Granted Weighted Average Exercise Price | $ / shares | $ 0.13 |
Granted Weighted Average Remaining Contractual Term | 5 years |
Granted Aggregate Intrinsic Value | $ | |
Forfeited Number of Shares | shares | (476,190) |
Forfeited Weighted Average Exercise Price | $ / shares | $ 0.21 |
Forfeited Weighted Average Remaining Contractual Term | 9 years 2 months 12 days |
Forfeited Aggregate Intrinsic Value | $ | |
Exercised Number of Shares | shares | |
Exercised Weighted Average Exercise Price | $ / shares | |
Exercised Weighted Average Remaining Contractual Term | |
Exercised Aggregate Intrinsic Value | $ | |
Expired Number of Shares | shares | |
Expired Weighted Average Exercise Price | $ / shares | |
Expired Weighted Average Remaining Contractual Term | |
Expired Aggregate Intrinsic Value | $ | |
Option Number of Shares outstanding at ending | shares | 38,151,502 |
Option Weighted Average Exercise Price outstanding at ending | $ / shares | $ 0.2 |
Option Weighted Average Remaining Contractual Term outstanding at ending | 6 years 1 month 24 days |
Option Aggregate Intrinsic Value outstanding at ending | $ | |
Option Number of Shares exercisable at ending | shares | 35,344,654 |
Option Weighted Average Exercise Price exercisable at ending | $ / shares | $ 0.2 |
Option Weighted Average Remaining Contractual Term exercisable at ending | 5 years 11 months 23 days |
Option Aggregate Intrinsic Value exercisable at ending | $ |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 9 Months Ended | ||
Nov. 12, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |||
Rental expense | $ 9,900 | $ 29,700 | |
Service percentage | 10% | ||
Training platform development | $ 4,750 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Feb. 18, 2022 | Sep. 30, 2022 | |
Commitments and Contingencies (Textual) | ||
Commitments and contingencies description | the Company signed an outsourced manufacturing agreement with Bioana, S.A.P.I. DE C.V. The agreement is for three years, ending December 31, 2024 for a minimum order quantity of 10,000 NeuroCaps per annum. Unit cost for the NeuroCap is fixed for the first year ending December 31, 2022. The approximate cost for this agreement in 2022 is $350,000. The manufacturing agreement will renew annually unless terminated in writing by one of the parties. | |
Approximate cost | $ 350,000 |