Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 26, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K/A | ||
Amendment Flag | true | ||
Amendment Description | This Amendment No. 1 on Form 10-K/A (“Amendment No. 1”) to the Annual Report (“Annual Report”) on Form 10-K for the fiscal year ended December 31, 2017 (the “Original Filing”) of Fuse Medical, Inc. (“Fuse”), is being filed solely for the purpose of amending and restating in its entirety the following Items (together, the “Amended Items”);•Part II, Item 8 to amend the Company’s disclosure of Fair Value Measurements with respect to the Company’s CPM Acquisition Earn-Out Liability.•Part II, Item 9A to amend the conclusions regarding the adequacy of Fuse’s disclosure controls and procedures as of December 31, 2017;•Part IV, Item 15 to amend the Company’s exhibits and financial statements schedules to reflect updated disclosure of Fair Value Measurements with respect to the Company’s CPM Acquisition Earn-Out Liability.In accordance with Rule 12b-15 under the U.S. Securities Exchange Act of 1934 (the “Exchange Act”), the Amended Items of the Original Filing have been amended and restated in their entirety. This Amendment No. 1 does not amend or otherwise update any information in the Original Filing. Accordingly, this Amendment No. 1 should be read in conjunction with the Original Filing. Capitalized terms used in this explanatory note not otherwise defined herein have the meaning given to them in the Original Filing. | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | FZMD | ||
Entity Registrant Name | Fuse Medical, Inc. | ||
Entity Central Index Key | 319,016 | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer | No | ||
Is Entity's Reporting Status Current | Yes | ||
Is Entity a Voluntary Filer | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 65,890,808 | ||
Entity Public Float | $ 2,205,059 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 804,715 | $ 778,447 |
Accounts receivable, net of allowance of $499,099 and $1,682,995, respectively | 6,570,382 | 6,508,286 |
Inventories, net of allowance of $1,110,742 and $1,134,013, respectively | 10,626,769 | 11,426,828 |
Prepaid expenses and other current assets | 32,466 | 23,018 |
Total current assets | 18,034,332 | 18,736,579 |
Property and equipment, net | 16,895 | 14,747 |
Security deposit | 3,822 | |
Deferred tax asset | 375,278 | |
Goodwill | 820,650 | 820,650 |
Total assets | 19,247,155 | 19,575,798 |
Current liabilities: | ||
Accounts payable | 2,588,091 | 2,452,922 |
Accrued expenses | 1,830,679 | 3,068,054 |
Notes payable - related parties | 150,000 | 150,000 |
Revolving line of credit | 3,415,351 | 3,305,347 |
Total current liabilities | 7,984,121 | 8,976,323 |
Earn-out liability | 19,244,543 | |
Total liabilities | 27,228,664 | 8,976,323 |
Commitments and contingencies | ||
Stockholders' equity (deficit): | ||
Preferred stock, $0.01 par value; 20,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.01 par value; 100,000,000 shares authorized; 69,158,308 issued and 65,890,808 outstanding at December 31, 2017 and 15,890,808 issued and outstanding at December 31, 2016 | 671,583 | 158,908 |
Additional paid-in capital | (8,653,092) | 10,440,567 |
Total stockholders' equity (deficit) | (7,981,509) | 10,599,475 |
Total liabilities and stockholders' equity (deficit) | $ 19,247,155 | $ 19,575,798 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Net of allowance, accounts receivable | $ 499,099 | $ 1,682,995 |
Net of allowance, inventories | $ 1,110,742 | $ 1,134,013 |
Preferred Stock Par Value | $ 0.01 | $ 0.01 |
Preferred Stock Shares Authorized | 20,000,000 | 20,000,000 |
Preferred Stock Shares Issued | 0 | 0 |
Preferred Stock Shares Outstanding | 0 | 0 |
Common Stock Par Value | $ 0.01 | $ 0.01 |
Common Stock Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock Shares Issued | 69,158,308 | 15,890,808 |
Common Stock Shares Outstanding | 65,890,808 | 15,890,808 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||
Net revenues | $ 26,407,206 | $ 25,666,650 |
Cost of revenues | 14,582,416 | 11,256,887 |
Gross profit | 11,824,790 | 14,409,763 |
Operating expenses | ||
Selling, general, administrative and other | 5,356,475 | 4,170,835 |
Commissions | 5,641,122 | 7,056,430 |
Gain on disposal of property and equipment | (5,367) | |
Depreciation | 14,521 | 19,091 |
Total operating expenses | 11,006,751 | 11,246,356 |
Operating income | 818,039 | 3,163,407 |
Other income (expense): | ||
Interest expense | (161,669) | (146,921) |
Extinguishment of debt | 43,308 | |
Total other income (expense) | (118,361) | (146,921) |
Net income | $ 699,678 | $ 3,016,486 |
Net income per common share - basic | $ 0.04 | $ 0.42 |
Net income per common share - diluted | $ 0.04 | $ 0.33 |
Weighted average number of common shares outstanding - basic | 16,027,794 | 7,185,890 |
Weighted average number of common shares outstanding - diluted | 19,473,553 | 9,214,606 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] |
Beginning Balance, Amount at Dec. 31, 2015 | $ 7,998,142 | $ 68,908 | $ 7,929,234 | |
Beginning Balance, Shares at Dec. 31, 2015 | 6,890,808 | |||
Member contribution (successor) | 775,949 | 775,949 | ||
Member distribution (successor) | (2,481,178) | (2,346,859) | $ (134,319) | |
Fuse capital, net | 1,290,076 | $ 90,000 | 4,082,243 | (2,882,167) |
Fuse capital, net, Shares | 9,000,000 | |||
Net income | 3,016,486 | 3,016,486 | ||
Ending Balance, Amount at Dec. 31, 2016 | 10,599,475 | $ 158,908 | 10,440,567 | |
Ending Balance, Shares at Dec. 31, 2016 | 15,890,808 | |||
Restricted stock awards granted | 42,609 | $ 12,675 | 29,934 | |
Restricted stock awards granted, Shares | 3,267,500 | |||
Purchase of CPM Medical Consultants, LLC | (19,244,543) | $ 500,000 | (19,744,543) | |
Purchase of CPM Medical Consultants, LLC, Shares | 50,000,000 | |||
Deferred tax asset | 375,278 | 375,278 | ||
Member contribution (successor) | 1,738,620 | 1,738,620 | ||
Member distribution (successor) | (2,192,626) | (1,492,948) | (699,678) | |
Net income | 699,678 | $ 699,678 | ||
Ending Balance, Amount at Dec. 31, 2017 | $ (7,981,509) | $ 671,583 | $ (8,653,092) | |
Ending Balance, Shares at Dec. 31, 2017 | 69,158,308 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 699,678 | $ 3,016,486 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of debt discount | 13,094 | |
Share-based compensation | 42,609 | |
Depreciation | 14,521 | 19,091 |
Gain on disposal of property and equipment | (5,067) | |
Extinguishment of debt | (43,308) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (62,096) | 995,785 |
Inventories, net | 2,022,723 | (139,993) |
Prepaid expenses and other current assets | (9,448) | 107 |
Security deposit | 3,822 | |
Accounts payable | 178,477 | (1,313,409) |
Accrued expenses | (1,236,527) | 199,177 |
Deferred rent | (848) | |
Net cash provided by operating activities | 1,604,536 | 2,790,338 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (20,334) | |
Insurance settlement proceeds | 8,732 | |
Proceeds from reverse acquisition | 655,390 | |
Net cash (used in) provided by investing activities | (11,602) | 655,390 |
Cash flows from financing activities: | ||
Payments on line of credit | (15,580,346) | (14,118,720) |
Borrowings on line of credit | 15,690,350 | 13,208,210 |
Member contributions (successor) | 273,044 | 375,210 |
Member distributions (successor) | (1,949,714) | (2,395,606) |
Net cash used in financing activities | (1,566,666) | (2,930,906) |
Net increase in cash and cash equivalents | 26,268 | 514,822 |
Cash and cash equivalents - beginning of year | 778,447 | 263,625 |
Cash and cash equivalents - end of year | 804,715 | 778,447 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 139,507 | 150,762 |
Supplemental disclosure of noncash operating and financing activities: | ||
Member contributions through reduction of accounts payable | 25,000 | |
Member contributions of inventory | 1,465,576 | 375,739 |
Member distributions of inventory | $ 242,912 | $ 85,572 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | Note 1. Nature of Operations Overview The Company was initially incorporated in 1968 as Golf Rounds.com, Inc., a Florida corporation. During July 1999, GolfRounds, Inc. was re-domesticated Change in Control Between the period July 2016 through October 2016, the Company obtained three loans in the aggregate amount of $150,000 in exchange for convertible promissory notes (the “Notes”) bearing 10% interest per annum, with principal due and payable, upon demand of the payee. The Notes were issued as follows: $100,000 to NC 143 Family Holdings, LP, a family limited partnership controlled by Mark W. Brooks (“NC 143”), the Company’s Chairman of the Board of Directors (the “Board”); and $50,000 to Reeg Medical Industries, Inc., an investment holding company owned and controlled by Christopher C. Reeg, the Company’s Chief Executive Officer (“RMI”, and together with NC 143, the “Investors”). The Investors have the sole discretion and right to convert all or any portion of the then unpaid principal and interest balance of the Notes into shares of the Company’s common stock at a conversion price of $0.08 per share. On December 19, 2016 (the “Change-in-Control Change-in-Control CPM Acquisition On December 15, 2017, Fuse entered into an agreement with NC 143 pursuant to which Fuse would purchase all of the outstanding membership interests of CPM Medical Consultants, LLC (“CPM”) (the “CPM Acquisition Agreement” and such transaction, the “CPM Acquisition”). On December 29, 2017, Fuse completed the previously-announced the CPM Acquisition, pursuant to the CPM Acquisition Agreement by Fuse and NC 143, dated December 15, 2017, whereby the Fuse would purchase all of the outstanding membership interests of CPM. Fuse issued 50 million shares of its common stock, par value $0.01 per share in exchange for 100% of the outstanding membership interests of CPM, at an agreed-upon value of $0.20 per share of common stock. The effective date of the CPM acquisition was December 31, 2017 (the “Effective Date”). The CPM Acquisition provides for contingent payments, (Earn-Out”) Fuse was the legal acquirer and, for accounting purposes, CPM was deemed to have acquired our Company in the CPM Acquisition. CPM is the successor entity and becomes the reporting entity which combines Fuse at the Change-in-Control Nature of Business Fuse is a national distributor of medical devices, who provides a broad portfolio of internal and external fixation products; upper and lower extremity plating and total joint reconstruction; soft tissue fixation and augmentation for sports medicine procedures; spinal implants for trauma, degenerative disc disease, and deformity indications (collectively, “Orthopedic Implants”) and a wide array of osteo-biologics and regenerative tissue which include human allografts, substitute bone materials and tendons, as well as regenerative tissues and fluids (“Biologics”). All of our medical devices are approved by the U.S. Food and Drug Administration (“FDA”) for sale in the United States, and all of our Biologics suppliers are licensed tissue banks accredited by the American Association of Tissue Banks (“AATB”). The Company’s board portfolio of Orthopedic Implants and Biologics provide high-quality products to assist surgeons with positive patient outcomes and cost-effective solutions for its customers, which include hospitals, medical facilities, and sub-distributors. non-exclusive Fuse continuously reviews and expands its product lines to ensure that they offer the most comprehensive, high-quality and cost-effective selection of Orthopedic Implants and Biologics so that the Company can be more relevant to its customer needs while continuing to grow its existing customer base. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2. Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Intercompany transactions have been eliminated in consolidation. Use of Estimates The preparation of the consolidated financial statements in accordance with generally accepted accounting principles in the United State, (“GAAP”). GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates in the accompanying consolidated financial statements include the allowances for doubtful accounts and contractual pricing, valuation of inventories, accrued commissions, the fair value calculation of stock based compensation, and fair value of Earn-Out Earnings Per Share Basic net income per common share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted net income per common share is computed by dividing net income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. As of December 31, 2017, 700,000 outstanding common stock equivalents have been included with diluted net earnings per share. As of December 31, 2017, and 2016, common stock equivalents included options to purchase 1,302,052 and 1,304,788 common shares, respectively. Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and Level 3—Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. In connection with the CPM Acquisition, the Company recorded a $19,244,543 liability related to the Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out The fair value of the Earn-Out Earn-Out Earn-Out Earn-Out The Earn-Out re-measurement The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The recorded value of notes payable approximates their fair value based upon their effective interest rates. Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents at December 31, 2017 and 2016. The Company’s cash is concentrated in large financial institutions that at times may exceed federally insured limits of $250,000 per financial institution. The Company has not experienced any losses from inception through December 31, 2017. As of December 31, 2017, and 2016, there were deposits of $537,388 and $421,636, respectively, greater than federally insured limits. Accounts Receivable and Allowances Accounts receivables are non-interest The Company estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated The Company’s management estimates its allowance for contractual pricing, by evaluating specific accounts where information indicates the customer is offered contractual pricing and discount allowances. In these arrangements, the Company’s management uses assumptions and judgement, based on the best available facts and circumstances to record a specific allowance for the amounts due from those customers. The allowance is offset by a corresponding reduction to revenue. These specific allowances are re-evaluated Accounts deemed uncollectible are written-off written-off Inventories Inventories are stated at the net realizable value (first-in, first-out). Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets per the following table. Leasehold improvements are amortized over the lesser of their useful life or the lease term. Expenditures for additions and improvements are capitalized while repairs and maintenance are expensed as incurred. Category Amortization Period Computer equipment 3 years Furniture and fixtures 3 years Office equipment 3 years Software 3 years Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed and a gain or loss is recorded in the consolidated statements of operations. Long-Lived Assets The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: (i) significant changes in performance relative to expected operating results, (ii) significant changes in the use of the assets, (iii) significant negative industry or economic trends, (iv) a significant decline in the Company’s stock price for a sustained period of time, and (v) changes in the Company’s business strategy. An impairment loss is recorded when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds fair value and is recorded as a reduction in the carrying value of the related asset and an expense to operating results. Based upon the Company’s assessment, there were no indicators of impairment of its long-lived assets at December 31, 2017 and 2016. Goodwill Goodwill is the excess of the purchase price over the fair value of net assets of acquired businesses. Goodwill is tested for impairment annually or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. The test for impairment requires us to make several estimates about fair value, most of which are based on projected future cash flows. The Company’s management estimates associated with the goodwill impairment test are considered critical due to the amount of goodwill recorded on our consolidated balance sheets and the judgment required in determining fair value, including projected future cash flows. No goodwill impairment has been recognized during 2017 or 2016. Revenue Recognition The Company recognizes revenue when: (i) persuasive evidence of an arrangement exists; (ii) the fees are fixed or determinable; (iii) no significant Company obligations remain; and (iv) collection of the related receivable is reasonably assured. The Company reports revenues for transactions in which it is the primary obligor on a gross basis and revenues in which it acts as an agent (earning a fixed percentage of the sale) on a net basis, (net of related costs). The Company reports funds collected from customers as deferred revenues until all revenue recognition criteria have been met. Revenues are sales of Orthopedic Implants and Biologics to support orthopedic surgeries and wound care. For customers that purchase products as needed, the Company invoices the customers on the date the product is utilized. For customers that have consigned product, the Company invoices the customers as each unit of the product is utilized. Payment terms are due upon receipt of invoice. Products that have been sold are not subject to returns unless the product is deemed defective. Credits or refunds are recognized when they are determinable and estimable. Net revenues have been reduced to account for sales returns, discounts and other incentives. Cost of Revenues Cost of revenues consists of cost of goods sold, freight and shipping costs for items sold to customers, cost of storage, and related supply chain costs. Shipping and Handling Fees The Company includes shipping and handling fees billed to customers in revenues and the related costs in cost of revenues. Income Taxes As a result of the CPM Acquisition, Fuse became the sole managing member of CPM and as a result, began consolidating the financial results of CPM. CPM is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, CPM is not subject to U.S. federal and most applicable state and local income tax purposes. As a partnership, CPM is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by CPM is passed through to an included in the taxable income or loss of its members. The Company uses the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. The Company has deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are subject to periodic recoverability assessments. Realization of the deferred tax assets, net of deferred tax liabilities, is principally dependent upon achievement of projected future taxable income. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. As of December 31, 2017, the Company had no liabilities for uncertain tax positions. The Company’s policy is to recognize interest and penalties related to income tax matters as a component of income tax expense. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law, and new authoritative rulings. Segment Information The Company operates in one reportable segment including medical products and supplies. The Company’s chief operating decision maker, is its Chief Executive Officer. The Company’s Chief Executive Officer manages the Company’s operations as a whole, and does not evaluate revenue, expense or operating income information on any component level. Stock-Based Compensation Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee non-employee Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, 2014-09 2014-09 2014-09 2014-09 In July 2015, the FASB issued ASU No. 2015-11 2015-11 In February 2016, the FASB issued Accounting Standards Update No. 2016-02, 2016-02 2016-02 In August 2016, the FASB issued ASU No. 2016-15, 2016-15 In November 2016, the FASB issued ASU Update No. 2016-18 2016-18 beginning-of-period end-of-period 2016-18 Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission, (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition | Note 3. Acquisition Between the period July 2016 through October 2016, the Company obtained three loans in the aggregate amount of $150,000 in exchange for the Notes bearing 10% interest per annum, with principal due and payable, upon demand of the payee. The Notes were issued as follows: $100,000 to NC 143, and $50,000 to RMI. The Investors have the sole discretion and right to convert all or any portion of the then unpaid principal and interest balance of the Notes into shares of the Company’s common stock at a conversion price of $0.08 per share. (see note 6). On December 19, 2016, the Company entered into a Stock Purchase Agreement by and between the Investors and the Company, pursuant to which NC 143 acquired 5 million shares of the Company’s common stock for a purchase price of $400,000 and RMI acquired 4 million shares of the Company’s common stock for a purchase price of $320,000 effective as of the Change-in-Control The closing of the Stock Purchase Agreement resulted in a change-in-control Change-in-Control 8-K, Change-in-Control On December 15, 2017, Fuse entered into the CPM Acquisition Agreement with NC 143 pursuant to which Fuse would purchase all of the outstanding membership interests of CPM. On December 29, 2017, Fuse completed the previously-announced CPM Acquisition, pursuant to the CPM Acquisition Agreement by Fuse and NC 143, dated December 15, 2017, whereby Fuse would purchase all of the outstanding membership interests of CPM. Fuse issued 50 million shares of its common stock, par value $0.01 per share in exchange for 100% of the outstanding membership interests of CPM, at an agreed-upon value of $0.20 per share of common stock. The effective date of the CPM Acquisition was December 31, 2017. Additional one-time The CPM Acquisition Agreement provides for Earn-Out Earn-Out Earn-Out On the Effective Date of the closing of the CPM acquisition, NC 143 and RMI beneficially acquired approximately 90.4% of the Company’s common stock outstanding. Fuse is the legal acquirer and, for accounting purposes, CPM was deemed to have acquired the Company in the CPM Acquisition. CPM is the successor entity and becomes the reporting entity which combines Fuse at the Change-in-Control The following unaudited pro forma summary financial information presents the consolidated results of operations for the Company as if the CPM Acquisition had occurred on January1, 2016. The pro forma results are shown for illustrative purposes only and do not purport to be indicative of the results that would have been reported if the CPM Acquisition had occurred on the date indicated or indicative of the results that may occur in the future. Unaudited pro forma information for the twelve months ended December 31, 2016 is as follows: Year Ended December 31, 2016 - Unaudited Historical Fuse Medical, Historical CPM Medical Pro forma Adjustments Pro forma Combined Revenue $ 567,607 $ 25,647,353 $ (103,578 ) $ 26,111,382 Net (loss) income $ (585,935 ) $ 3,035,296 $ — $ 2,449,361 Net (loss) income per common share - basic $ — $ — $ — $ 0.34 The supplemental pro forma earnings were adjusted to exclude $103,578 for the year ended December 31, 2016. The number of shares outstanding used in calculating the net (loss) per common share – basic was 7,185,890 for the year ended December 31, 2016. The Company is managed and operates in one segment, with Fuse merged into the CPM existing operations. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 4. Property and Equipment Property and equipment consisted of the following at December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Computer equipment $ — $ 29,290 Furniture and fixtures 5,047 6,347 Leasehold improvements — 6,728 Office equipment 21,913 9,221 Software — 34,252 26,960 85,838 Less: accumulated depreciation (10,065 ) (71,091 ) Property and equipment, net $ 16,895 $ 14,747 During the year ended December 31, 2017, the Company sold fixed assets having a net book value of $607 for cash proceeds of $300, retired fixed assets no longer in use with a net book value of $3,058, and recorded $8,732 of insurance settlements proceeds for a fully depreciated fixed asset. Depreciation expense for the years ended December 31, 2017 and 2016 was $14,521 and $19,091, respectively. |
Revolving Line of Credit
Revolving Line of Credit | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Revolving Line of Credit | Note 5. Revolving Line of Credit On December 29, 2017, Fuse became party to a revolving line of credit (“RLOC”) with ZB, N.A. (d/b/a Amegy Bank), to facilitate the December 31, 2017 CPM Acquisition. The RLOC establishes an asset based senior secured revolving credit facility in the amount of $5,000,000. The RLOC bears interest at a variable rate based on the one-month The outstanding balance of the RLOC was $3,415,351 and $3,305,347 at December 31, 2017 and 2016, respectively. Interest expense incurred was $134,668 and $133,334 for 2017 and 2016, respectively. |
Notes Payable - Related Parties
Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | Note 6. Notes Payable – Related Parties During July 2016 through October 2016, the Company obtained three short-term loans in the aggregate amount of $150,000 in exchange for promissory notes bearing 10% interest per annum, which principal shall be due and payable, upon demand of the payee. Notwithstanding, at the holder’s sole discretion, the holder has the right to convert all or any portion of the then unpaid principal and interest balance into shares of the Company’s common stock at a conversion price of $0.08 per share. On each respective date of issuance, the conversion price of each of the promissory notes was less than the market price of the Company’s common stock. This resulted in a beneficial conversion feature in the aggregate amount of $117,500, which was treated as a discount to each of the promissory notes and amortized over the term of each respective promissory note. Subsequent to the issuance of the notes, affiliates of the noteholders entered into the Stock Purchase Agreement with the Company (See Notes 1 and 11). Notes payable – related parties consisted of the following: December 31, 2017 December 31, 2016 Notes Payable originating July 15, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand $ 50,000 $ 50,000 Notes Payable originating August 23, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand 50,000 50,000 Notes Payable originating October 19, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand 50,000 50,000 Total 150,000 150,000 Less: current maturities (150,000 ) (150,000 ) Amount due after one year $ — $ — During the year ended December 31, 2017 and 2016, interest expense of $27,000 and $13,587 (of which $13,094 was related to the amortization of the beneficial conversion feature), respectively, was recognized on outstanding notes payable – related parties. As of December 31, 2017, and 2016, accrued interest payable was $32,096 and $5,096, respectively, which is included in accrued expenses on the accompanying consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Legal Matters On January 27, 2014, M. Richard Cutler and Cutler Law Group, P.C. (the “Plaintiffs”) filed a complaint in the District Court of Harris County, Texas, 201 4-03355, On September 18, 2015, Plaintiffs refiled a complaint in the District Court of Harris County, Texas, Cause No. 2015-55652 and added PH Squared, LLC as an additional Plaintiff. Thereafter, the term “Plaintiffs” collectively refers to M. Richard Cutler, Cutler Law Group, P.C. and PH Squared, LLC. The new complaint asserts essentially the same claims as the original nonsuited complaint: (i) suit on sworn account against Fuse; (ii) fraud against all Defendants; and (iii) breach of contract against all Defendants for allegedly violating a non-circumvention/non-disclosure non-circumvention/non-disclosure During April 2017, one of the named individuals in the complaint filed for bankruptcy protection. There is currently no trial date set. The Company’s management continues to believe that the lawsuit is completely without merit and will vigorously contest it and protect the Company’s interests. Operating Leases The Company leases office space under a noncancelable operating lease agreement, from a real estate investments company that is owned and controlled by the Company’s Chairman of the Board and President. This lease terminated December 31, 2017 with month-to-month The Company leases office equipment under two noncancelable operating lease agreements which expire March 2019 and February 2021. In aggregate, these office equipment leases require monthly payments of approximately $779. Rent expense for the equipment leases totaled approximately $11,000 and $8,000 for the years ended December 31, 2017 and 2016, respectively, and are included in selling, general, administrative and other expenses. The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2017: Year ending December 31, 2018 $ 9,000 2019 5,000 2020 3,000 2021 500 $ 17,500 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders Equity Deficit [Abstract] | |
Stockholders' Equity | Note 8. Stockholders’ Equity Authorized Capital The Company has authorized 100,000,000 shares of common stock having a par value of $0.01 per share, and its Board is authorized to issue shares of the common stock, in one or more series, and to fix for each such series the voting powers, designations, preferences, or other special rights and the qualifications, limitations or restrictions. The Company has authorized 20,000,000 shares of preferred stock having a par value of $0.01 per share, and its Board is authorized to issue shares of the preferred stock, in one or more series, and to fix for each such series the voting powers, designations, preferences, or other special rights and the qualifications, limitations or restrictions. Common Stock On December 29, 2017, Fuse completed the previously-announced acquisition of CPM, pursuant to the CPM Acquisition Agreement by Fuse and NC 143, dated December 15, 2017, whereby the Fuse would purchase all of the outstanding membership interests of CPM. Fuse issued 50,000,000 shares of its common stock, par value $0.01 per share in exchange for 100% of the outstanding equity interests of CPM, at an agreed-upon value of $0.20 per share of common stock, as reflected in the fairness opinion provided by ValueScope. The Effective Date of the CPM acquisition was December 31, 2017. On December 19, 2016, the Company entered into the Stock Purchase Agreement by and between the Investors and the Company, pursuant to which NC 143 acquired 5 million shares of the Company’s common stock for a purchase price of $400,000 and RMI acquired 4 million shares of the Company’s common stock for a purchase price of $320,000, effective as of the Change-in-Control Stock Incentive Plans The Company has a stock-based compensation plan which provides for the granting of equity awards, including qualified incentive and non-qualified On September 21, 2017, the Board approved an amendment to the 2017 Plan to increase the number of shares of common stock authorized for issuance under the 2017 Plan from 1,500,000 shares of common stock to 2,500,000 shares of common stock. On October 4, 2017, the Board approved an amendment to the 2017 Plan to increase the number of shares of common stock authorized for issuance under the 2017 Plan from 2,500,000 shares of common stock to 4,500,000 shares of common stock. Stock Options The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of the Company’s stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC Topic 718 requirements. These amounts are the Company’s estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award. The Company did not grant stock options in 2017. The following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted to employees during the year ended December 31, 2016: Assumptions For the Year Ended December 31, For the Year Ended December 31, Expected term (years) — 2.5 Expected volatility 0 % 162 % Weighted-average volatility 0 % 162 % Risk-free interest rate 0.00 % 1.43 % Dividend yield 0.0 % 0.0 % Expected forfeiture rate n/a n/a The Company’s management utilized the simplified method to estimate the expected life for stock options granted to employees, as the Company does not have sufficient historical data regarding stock option exercises. The expected volatility is based on historical volatility of the Company’s common stock subsequent to the closing of the Reverse Merger. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected life of the related option at the time of the grant. Dividend yield is based on historical trends. While the Company’s management believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased. A summary of the Company’s stock option activity during the year ended December 31, 2017 is presented below: No. of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Balance outstanding at December 31, 2016 1,304,788 $ 0.22 Granted — $ — Exercised — $ — Forfeited — $ — Expired (2,736 ) $ 12.13 Balance outstanding at December 31, 2017 1,302,052 $ 0.20 3.3 $ 1,717,000 Exercisable at December 31, 2017 1,302,052 $ 0.20 3.3 $ 1,717,000 The weighted-average grant-date fair value of options granted during the year ended December 31, 2016 was $0.09. Restricted Common Stock On September 21, 2017, the Company’s Board granted an aggregate of 325,000 Restricted Stock Awards (“RSA’s”) pursuant to the Company’s 2017 Plan, to the Board as annual compensation. The RSA’s have a fair market value of $0.78 on the date of grant and fully vest upon the one-year On September 21, 2017, the Company’s Board granted an aggregate of 2,000,000 RSA’s pursuant to the 2017 Plan, to the Company’s independent directors as compensation. The RSA’s have a fair market value of $0.78 on the date of grant and vest fully upon the earlier of a change in control of the Company or the Company’s listing on a national securities exchange. As of December 31, 2017, the Company had not amortized any amounts relating to the vesting of these shares due to the uncertainty of meeting these vesting milestones. On December 14, 2017, the Board awarded a total of 942,500 shares of common stock of the Company, in the form of RSAs issued in accordance with the 2017 Plan of the Company, to the members of the Board of the Company as annual compensation for services rendered to the Company as Board members. Each member of the Board was granted an RSA constituting 188,500 shares of the Company’s common stock. Based in part on the analysis of the fairness opinion provided by a third-party valuation specialist, the Board determined that the common stock within each RSA had a fair market value of $0.20 on the date of grant. As of December 31, 2017, the Company had amortized $20,945 relating to the vesting of these shares which is included in selling, general, administrative and other expenses, and $167,555 which will be recognized as an expense in future periods as the shares vest. The Board voted to revise the $0.78 fair market value for each share issued pursuant to each RSA granted on September 21, 2017, to $0.20. The Board voted to amend the indicated fair market value in the September grants to $0.20 based in part on the analysis within the fairness opinion provided by the third-party valuation specialist. The following table summarizes restricted common stock activity: Number of Shares Fair Value Weighted Average Grant Date Fair Value Non-vested, — $ — $ — Granted 3,267,500 1,813,500 0.56 Vested — — — Forfeited — — — Non-vested, 3,267,500 $ 1,813,500 $ 0.56 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9. Income Taxes As a result of the CPM Acquisition, Fuse became the sole managing member of CPM and as a result, began consolidating the financial results of CPM. CPM is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, CPM is not subject to U.S. federal and most applicable state and local income tax purposes. As a partnership, CPM is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by CPM is passed through to an included in the taxable income or loss of its members. Fuse is subject to U.S. federal income taxes, in addition to state and local income taxes. The components of income tax expense (benefit) are as follows: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Current: Federal $ — $ — State 40,818 51,627 40,818 51,627 Deferred: Federal — — State — — — — Total Income tax expense (benefit) $ 40,818 $ 51,627 Significant components of the Company’s deferred income tax assets and liabilities are as follows: December 31, 2017 December 31, 2016 Deferred tax assets: Net operating loss carryover $ 172,704 $ 224,381 Intangibles 40,342 — Accounts receivable 81,927 — Compensation 57,458 80,850 Inventory 25,792 — Total deferred tax assets 378,223 305,231 Deferred tax liabilities: Prepaid expenses — — Property and equipment (2,945 ) 2,795 Total deferred tax liabilities (2,945 ) 2,795 Deferred tax assets, net 375,278 308,026 Valuation allowance: Beginning of year (308,026 ) (700,713 ) (Increase) decrease during year 308,026 392,687 Ending balance — (308,026 ) Net deferred tax asset $ 375,278 $ — In 2016 and 2017 CPM is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, CPM is not subject to U.S. federal and certain state income taxes. Any taxable income or loss generated by CPM during 2016 and 2017 is passed through to and included in the taxable income or loss of its members. Accordingly, our consolidated financial statements for 2017 do not include a provision for federal or state income tax purposes. Fuse is treated as a corporation for U.S. federal and applicable state and local income tax purposes. As a corporation, Fuse is subject to U.S. federal and applicable state income taxes. A valuation allowance is established if it is more likely than not that all or a portion of the deferred tax asset will not be realized. The Company has recorded a valuation allowance in 2016 due to the uncertainty of realization. As a result of the organizational transactions of Fuse and CPM in 2017, it is more likely than not that the tax deferred tax assets benefits would be realized. At December 31, 2017, Fuse had $822,399 of net operating loss carryforwards which will expire from 2018 to 2037. These carry forward benefits may be subject to annual limitations due to the ownership change limitations imposed by the Internal Revenue Code and similar state provisions. The annual limitation, if imposed, may result in the expiration of net operating losses before utilization. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for unrecognized tax benefits. As of December 31, 2017, tax years 2012 through 2015 remain open for IRS audit. The Company has received no notice of audit from the Internal Revenue Service for any of the open tax years. A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Statutory U.S. federal income tax rate 35.0 % 35.0 % State income taxes, net of federal tax benefit 5.8 % 1.7 % Permanent differences 3.8 % 0.3 % Other reconciling items 20.5 % 19.8 % LLC flow-through structure (59.3 %) (42.1 %) Valuation allowance 0.0 % (13.0 %) Effective income tax rate 5.8 % 1.7 % |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2017 | |
Nature Of Operations And Going Concern [Abstract] | |
Concentrations | Note 10. Concentrations Concentration of Revenues, Accounts Receivable and Suppliers For the years ended December 31, 2017 and 2016, the following significant customers had an individual percentage of total revenues equaling 10% or greater: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Customer 1 (related party) 18.70 % 18.33 % Customer 2 18.06 % 11.61 % Totals 36.76 % 29.94 % At December 31, 2017 and 2016, the following significant customers had a concentration of accounts receivable representing 10% or greater of accounts receivable: December 31, 2017 December 31, 2016 Customer 1 (related party) 24.80 % 25.21 % Customer 2 15.26 % 12.92 % Totals 40.06 % 38.13 % For the years ended December 31, 2017 and 2016, the following significant suppliers represented 10% or greater of goods purchased: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Supplier 1 22.34 % 22.36 % Totals 22.34 % 22.36 % |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11. Related Party Transactions Change in Control Between the period July 2016 through October 2016, we obtained three loans in the aggregate amount of $150,0in exchange for convertible promissory notes (the “Notes”) bearing 10% interest per annum, with principal due and payable, upon demand of the payee. The Notes were issued as follows: $100,000 to NC 143 Family Holdings, LP, a family limited partnership controlled by Mark W. Brooks (“NC 143”), our Chairman of the Board of Directors (the “Board”); and $50,000 to Reeg Medical Industries, Inc., an investment holding company owned and controlled by Christopher C. Reeg, our Chief Executive Officer (“RMI”, and together with NC 143, the “Investors”). The Investors have the sole discretion and right to convert all or any portion of the then unpaid principal and interest balance of the Notes into shares of our common stock at a conversion price of $0.08 per share. Since December of 2016, the Company has been controlled by the Investors, who are its two primary stockholders. On the Change- in-Control Change-in-Control The closing of the Stock Purchase Agreement resulted in a change-in-control Change-in-Control 8-K, CPM Acquisition On December 15, 2017, Fuse entered into an agreement with NC 143 pursuant to which Fuse would purchase all of the outstanding membership interests of CPM Medical Consultants, LLC (“CPM”) (the “CPM Acquisition Agreement” and such transaction, the “CPM Acquisition”). On December 29, 2017, Fuse completed the previously-announced acquisition of CPM Acquisition, pursuant to the CPM Acquisition Agreement by Fuse and NC 143, dated December 15, 2017, whereby Fuse would purchase all of the outstanding membership interests of CPM. Fuse issued 50 million shares of its common stock, par value $0.01 per share in exchange for 100% of the outstanding membership interests of CPM, at an agreed-upon value of $0.20 per share of common stock. The effective date of the CPM Acquisition was December 31, 2017 (the “Effective Date”). The CPM Acquisition provides for contingent payments to NC 143 subject to certain sales and profitability targets being met by the Company for years after 2017. For accounting purposes, CPM was deemed to have acquired Fuse in the CPM Acquisition because NC 143 and RMI had combined majority control of our issued and outstanding common stock and they jointly have the power to appoint a majority of our members of the Board. Because Fuse is the legal acquirer, the CPM Acquisition was accounted for as a reverse acquisition of an entity under common control. CPM is the successor entity and becomes the reporting entity which combines Fuse at the Change-in-Control Lease with 1565 North Central Expressway, LP The Company leases an approximately 11,500 square-foot space as its principal executive office, located at 1565 North Central Expressway, Suite 220, Richardson, Texas 75080 from 1565 North Central Expressway, LP, a real estate investment company that is owned and controlled by the Company’s Chairman of the Board and President. The CPM lease was effective January 1, 2013 and the Fuse lease was effective July 14, 2017. The leases terminated December 31, 2017 with month-to-month mid-term AmBio Contract The Company has engaged AmBio Staffing, LLC (“AmBio”) a Texas licensed Professional Employment Organization, (“PEO”) to provide payroll processing, employee benefit administration, and related human capital services effective January 1, 2017. The Company’s Chairman of the Board and President, Mark W. Brooks, owns and controls AmBio. As of March 26, 2018, AmBio operations supports approximately 74 full time equivalents (“FTE”). Of those 74 FTEs, 42 FTEs directly support the Company, 19 FTEs support the operations of other companies and the Company shares 13 FTEs with other companies. Operations The Company enters into various related party transactions with entities that are owned by or affiliated with the Company’s Named Executive Officers and Directors. The transactions included sales, purchases, commissions paid for services, and revenues related to services provided to the related party. MedUSA Group, LLC MedUSA Group, LLC (“MedUSA”) is a sub-distributor During the years ended December 31, 2017 and 2016, we had net sales of approximately $5,054,000 and $4,797,000, respectively, to MedUSA for product used in surgical cases. During the years ended December 31, 2017 and 2016, we incurred commission expense of approximately $962,000 and $642,000, respectively, to MedUSA for services provided to us in surgical cases. As of December 31, 2017, and 2016, we had balances due from MedUSA of approximately $1,684,000 and $1,752,000, respectively, included in accounts receivable on the accompanying consolidated balance sheets. Texas Overlord, LLC Texas Overlord, LLC (“Overlord”) is an investment holding company owned and controlled by our Chairman of the Board. During the years ended December 31, 2017 and 2016, we had net sales of approximately $1,953,000 and $0.00, respectively, to Overlord for product used in surgical cases. During the years ended December 31, 2017 and 2016, we incurred commission expense of approximately $101,000 and $0.00, respectively, to Overlord for services provided to us in surgical cases. As of December 31, 2017, and 2016, we had balances due from Overlord of approximately $444,000 and $0.00, respectively, included in accounts receivable on the accompanying consolidated balance sheets. N.B.M.J., Inc. N.B.M.J., Inc. (“NBMJ”) is a Durable Medical Equipment (“DME”) distributor and a wound care distributor owned and controlled by our Chairman of the Board. During the years ended December 31, 2017 and 2016, we had net sales of approximately $162,000 and $715,000, respectively, to NBMJ for product used in surgical cases. During the years ended December 31, 2017 and 2016, we incurred commission expense of approximately $0.00 and $0.00, respectively, to NBMJ for services provided to us in surgical cases. As of December 31, 2017, and 2016, we had balances due from NBMJ of approximately $0.00 and $47,000, respectively, included in accounts receivable on the accompanying consolidated balance sheets. Palm Springs Partners d/b/a Maxim Surgical, LLC Palm Springs Partners d/b/a Maxim Surgical, LLC (“Maxim”) is a manufacturer/distributor owned and controlled by Christopher C. Reeg, our Chief Executive Officer and Secretary, and Mark W. Brooks, our Chairman of the Board and President. During the year ending December 31, 2017 and 2016, we had net sales of approximately $202,000 and $164,000 to Maxim for product used in surgical cases. During the year ending December 31, 2017 and 2016, we purchased approximately $468,000 and $458,000 from Maxim. As of December 31, 2017, and 2016, we had a balance due from Maxim of approximately $50,000 and $45,000, included in accounts receivable on the accompanying consolidated balance sheets. As of December 31, 2017, and 2016, we had a balance due to Maxim of approximately $93,000 and $102,000, included in accounts payable on the accompanying consolidated balance sheets. Sintu, LLC Sintu, LLC (“Sintu”) is a sub-distributor During the year ended December 31, 2017 and 2016, we incurred commission expense of approximately $1,114,000 and $692,000 to Sintu for services provided in surgical cases. Other During the years ended December 31, 2017 and 2016, the Company had net sales of approximately $1,055,000 and $396,000, respectively, to these entities for product used in surgical cases. During the years ended December 31, 2017 and 2016, the Company had purchases of approximately $128,000 and $8,000, respectively, from these entities. During the years ended December 31, 2017 and 2016, the Company incurred commission expense of approximately $248,000 and $702,000, respectively, to these entities for services provided in surgical cases. The Company also had other income related to charges for shared services it provided to the related party of approximately $33,000 and $114,000 for the years ended December 31, 2017 and 2016, respectively, included with selling, general, and administrative expenses on the accompanying consolidated statements of operations. As of December 31, 2017, and 2016, the Company had balances due from these entities of approximately $169,000 and $159,000, respectively, included in accounts receivable on the accompanying consolidated balance sheets. The Company engages AmBio, a licensed PEO to provide payroll processing, employee benefit administration, and related human capital services. AmBio is controlled by the Chairman of the Board and President. As of December 31, 2017, and 2016, the Company had balances due to AmBio of approximately $112,000 and $107,000. As of December 31, 2017, and 2016, approximately $162,000 and $162,000 of fees were paid to AmBio for such services, respectively, and are reflected with in selling, general, and administrative expenses on the accompanying consolidated statements of operations. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through April 5, 2018, the date the financial statements were available to be issued. On January 30, 2018, the Company received notice from UOC USA, Inc. (“UOC”) that UOC has elected to terminate the distribution agreement dated January 1, 2011, as amended (the “UOC Agreement”) between the Company’s wholly-owned subsidiary, CPM, and UOC. While the UOC Agreement terminated on February 28, 2018, in accordance with its terms and conditions, the UOC Agreement also authorized the continued provision of UOC products at UOC-contracted Pursuant to the UOC Agreement, in consideration for mutual promises and covenants, the Company was appointed as a non-exclusive At UOC’s sole discretion, the termination notice provides for the repurchase of the Company’s unsold UOC orthopedic implants by UOC on or before April 30, 2018. The Company’s revenue derived from the sale and distribution of UOC products was approximately $4.3 million or 16% and $4.9 million or 19%, for the year-ended December 31, 2017, and December 31, 2016, respectively. The Company’s Management concluded there are no other material events or transactions for potential recognition or disclosure. |
Significant Accounting Polici19
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. Intercompany transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with generally accepted accounting principles in the United State, (“GAAP”). GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements. Actual results could differ from those estimates. Significant estimates in the accompanying consolidated financial statements include the allowances for doubtful accounts and contractual pricing, valuation of inventories, accrued commissions, the fair value calculation of stock based compensation, and fair value of Earn-Out |
Earnings Per Share | Earnings Per Share Basic net income per common share is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Shares of restricted stock are included in the basic weighted average number of common shares outstanding from the time they vest. Diluted net income per common share is computed by dividing net income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. As of December 31, 2017, 700,000 outstanding common stock equivalents have been included with diluted net earnings per share. As of December 31, 2017, and 2016, common stock equivalents included options to purchase 1,302,052 and 1,304,788 common shares, respectively. |
Fair Value Measurements | Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company classifies assets and liabilities recorded at fair value under the fair value hierarchy based upon the observability of inputs used in valuation techniques. Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions. The fair value measurements are classified under the following hierarchy: Level 1—Observable inputs that reflect quoted market prices (unadjusted) for identical assets and liabilities in active markets; Level 2—Observable inputs, other than quoted market prices, that are either directly or indirectly observable in the marketplace for identical or similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities; and Level 3—Unobservable inputs that are supported by little or no market activity that are significant to the fair value of assets or liabilities. In connection with the CPM Acquisition, the Company recorded a $19,244,543 liability related to the Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out Earn-Out The fair value of the Earn-Out Earn-Out Earn-Out Earn-Out The Earn-Out re-measurement The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The recorded value of notes payable approximates their fair value based upon their effective interest rates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. There were no cash equivalents at December 31, 2017 and 2016. The Company’s cash is concentrated in large financial institutions that at times may exceed federally insured limits of $250,000 per financial institution. The Company has not experienced any losses from inception through December 31, 2017. As of December 31, 2017, and 2016, there were deposits of $537,388 and $421,636, respectively, greater than federally insured limits. |
Accounts Receivable and Allowances | Accounts Receivable and Allowances Accounts receivables are non-interest The Company estimates its allowance for doubtful accounts by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations, such as bankruptcy proceedings and receivable amounts outstanding for an extended period beyond contractual terms. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated The Company’s management estimates its allowance for contractual pricing, by evaluating specific accounts where information indicates the customer is offered contractual pricing and discount allowances. In these arrangements, the Company’s management uses assumptions and judgement, based on the best available facts and circumstances to record a specific allowance for the amounts due from those customers. The allowance is offset by a corresponding reduction to revenue. These specific allowances are re-evaluated Accounts deemed uncollectible are written-off written-off |
Inventories | Inventories Inventories are stated at the net realizable value (first-in, first-out). |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets per the following table. Leasehold improvements are amortized over the lesser of their useful life or the lease term. Expenditures for additions and improvements are capitalized while repairs and maintenance are expensed as incurred. Category Amortization Period Computer equipment 3 years Furniture and fixtures 3 years Office equipment 3 years Software 3 years Upon the retirement or disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed and a gain or loss is recorded in the consolidated statements of operations. |
Long-Lived Assets | Long-Lived Assets The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: (i) significant changes in performance relative to expected operating results, (ii) significant changes in the use of the assets, (iii) significant negative industry or economic trends, (iv) a significant decline in the Company’s stock price for a sustained period of time, and (v) changes in the Company’s business strategy. An impairment loss is recorded when the carrying amount of the long-lived asset is not recoverable and exceeds its fair value. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds fair value and is recorded as a reduction in the carrying value of the related asset and an expense to operating results. Based upon the Company’s assessment, there were no indicators of impairment of its long-lived assets at December 31, 2017 and 2016. |
Goodwill | Goodwill Goodwill is the excess of the purchase price over the fair value of net assets of acquired businesses. Goodwill is tested for impairment annually or whenever an event occurs or circumstances change that would indicate that the carrying amount may be impaired. The test for impairment requires us to make several estimates about fair value, most of which are based on projected future cash flows. The Company’s management estimates associated with the goodwill impairment test are considered critical due to the amount of goodwill recorded on our consolidated balance sheets and the judgment required in determining fair value, including projected future cash flows. No goodwill impairment has been recognized during 2017 or 2016. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue when: (i) persuasive evidence of an arrangement exists; (ii) the fees are fixed or determinable; (iii) no significant Company obligations remain; and (iv) collection of the related receivable is reasonably assured. The Company reports revenues for transactions in which it is the primary obligor on a gross basis and revenues in which it acts as an agent (earning a fixed percentage of the sale) on a net basis, (net of related costs). The Company reports funds collected from customers as deferred revenues until all revenue recognition criteria have been met. Revenues are sales of Orthopedic Implants and Biologics to support orthopedic surgeries and wound care. For customers that purchase products as needed, the Company invoices the customers on the date the product is utilized. For customers that have consigned product, the Company invoices the customers as each unit of the product is utilized. Payment terms are due upon receipt of invoice. Products that have been sold are not subject to returns unless the product is deemed defective. Credits or refunds are recognized when they are determinable and estimable. Net revenues have been reduced to account for sales returns, discounts and other incentives. |
Cost of Revenues | Cost of Revenues Cost of revenues consists of cost of goods sold, freight and shipping costs for items sold to customers, cost of storage, and related supply chain costs. |
Shipping and Handling Fees | Shipping and Handling Fees The Company includes shipping and handling fees billed to customers in revenues and the related costs in cost of revenues. |
Income Taxes | Income Taxes As a result of the CPM Acquisition, Fuse became the sole managing member of CPM and as a result, began consolidating the financial results of CPM. CPM is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, CPM is not subject to U.S. federal and most applicable state and local income tax purposes. As a partnership, CPM is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by CPM is passed through to an included in the taxable income or loss of its members. The Company uses the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount that more likely than not will be realized. The Company has deferred tax assets and liabilities that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets are subject to periodic recoverability assessments. Realization of the deferred tax assets, net of deferred tax liabilities, is principally dependent upon achievement of projected future taxable income. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. As of December 31, 2017, the Company had no liabilities for uncertain tax positions. The Company’s policy is to recognize interest and penalties related to income tax matters as a component of income tax expense. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law, and new authoritative rulings. |
Segment Information | Segment Information The Company operates in one reportable segment including medical products and supplies. The Company’s chief operating decision maker, is its Chief Executive Officer. The Company’s Chief Executive Officer manages the Company’s operations as a whole, and does not evaluate revenue, expense or operating income information on any component level. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is measured at the grant date fair value of the award and is expensed over the requisite service period. For employee stock-based awards, the Company calculates the fair value of the award on the date of grant using the Black-Scholes option pricing model. Determining the fair value of stock-based awards at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. For non-employee non-employee |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, 2014-09 2014-09 2014-09 2014-09 In July 2015, the FASB issued ASU No. 2015-11 2015-11 In February 2016, the FASB issued Accounting Standards Update No. 2016-02, 2016-02 2016-02 In August 2016, the FASB issued ASU No. 2016-15, 2016-15 In November 2016, the FASB issued ASU Update No. 2016-18 2016-18 beginning-of-period end-of-period 2016-18 Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission, (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Significant Accounting Polici20
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives Of Assets | Expenditures for additions and improvements are capitalized while repairs and maintenance are expensed as incurred. Category Amortization Period Computer equipment 3 years Furniture and fixtures 3 years Office equipment 3 years Software 3 years |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Unaudited Pro Forma Information | Unaudited pro forma information for the twelve months ended December 31, 2016 is as follows: Year Ended December 31, 2016 - Unaudited Historical Fuse Medical, Historical CPM Medical Pro forma Adjustments Pro forma Combined Revenue $ 567,607 $ 25,647,353 $ (103,578 ) $ 26,111,382 Net (loss) income $ (585,935 ) $ 3,035,296 $ — $ 2,449,361 Net (loss) income per common share - basic $ — $ — $ — $ 0.34 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following at December 31, 2017 and 2016: December 31, 2017 December 31, 2016 Computer equipment $ — $ 29,290 Furniture and fixtures 5,047 6,347 Leasehold improvements — 6,728 Office equipment 21,913 9,221 Software — 34,252 26,960 85,838 Less: accumulated depreciation (10,065 ) (71,091 ) Property and equipment, net $ 16,895 $ 14,747 |
Notes Payable - Related Parti23
Notes Payable - Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable in Related Parties | Notes payable – related parties consisted of the following: December 31, 2017 December 31, 2016 Notes Payable originating July 15, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand $ 50,000 $ 50,000 Notes Payable originating August 23, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand 50,000 50,000 Notes Payable originating October 19, 2016; no monthly payments required; bearing interest at 10%; due on December 31, 2016, convertible on demand 50,000 50,000 Total 150,000 150,000 Less: current maturities (150,000 ) (150,000 ) Amount due after one year $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Operating Leases | The following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining noncancelable lease terms in excess of one year as of December 31, 2017: Year ending December 31, 2018 $ 9,000 2019 5,000 2020 3,000 2021 500 $ 17,500 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders Equity Deficit Tables [Abstract] | |
Summary of Compensation Expense for Stock Options Granted to Employees | The following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted to employees during the year ended December 31, 2016: Assumptions For the Year Ended December 31, For the Year Ended December 31, Expected term (years) — 2.5 Expected volatility 0 % 162 % Weighted-average volatility 0 % 162 % Risk-free interest rate 0.00 % 1.43 % Dividend yield 0.0 % 0.0 % Expected forfeiture rate n/a n/a |
Summary of Stock Option Activity | A summary of the Company’s stock option activity during the year ended December 31, 2017 is presented below: No. of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Balance outstanding at December 31, 2016 1,304,788 $ 0.22 Granted — $ — Exercised — $ — Forfeited — $ — Expired (2,736 ) $ 12.13 Balance outstanding at December 31, 2017 1,302,052 $ 0.20 3.3 $ 1,717,000 Exercisable at December 31, 2017 1,302,052 $ 0.20 3.3 $ 1,717,000 |
Summary of Restricted Common Stock Activity | The following table summarizes restricted common stock activity: Number of Shares Fair Value Weighted Average Grant Date Fair Value Non-vested, — $ — $ — Granted 3,267,500 1,813,500 0.56 Vested — — — Forfeited — — — Non-vested, 3,267,500 $ 1,813,500 $ 0.56 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Components of Income Tax Expense (Benefit) | The components of income tax expense (benefit) are as follows: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Current: Federal $ — $ — State 40,818 51,627 40,818 51,627 Deferred: Federal — — State — — — — Total Income tax expense (benefit) $ 40,818 $ 51,627 |
Significant Components of Deferred Income Tax Assets and Liabilities | Significant components of the Company’s deferred income tax assets and liabilities are as follows: December 31, 2017 December 31, 2016 Deferred tax assets: Net operating loss carryover $ 172,704 $ 224,381 Intangibles 40,342 — Accounts receivable 81,927 — Compensation 57,458 80,850 Inventory 25,792 — Total deferred tax assets 378,223 305,231 Deferred tax liabilities: Prepaid expenses — — Property and equipment (2,945 ) 2,795 Total deferred tax liabilities (2,945 ) 2,795 Deferred tax assets, net 375,278 308,026 Valuation allowance: Beginning of year (308,026 ) (700,713 ) (Increase) decrease during year 308,026 392,687 Ending balance — (308,026 ) Net deferred tax asset $ 375,278 $ — |
Reconciliation of Income Tax Computed at U.S. Statutory Rate to Effective Income Tax Rate | A reconciliation of income tax computed at the U.S. statutory rate to the effective income tax rate is as follows: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Statutory U.S. federal income tax rate 35.0 % 35.0 % State income taxes, net of federal tax benefit 5.8 % 1.7 % Permanent differences 3.8 % 0.3 % Other reconciling items 20.5 % 19.8 % LLC flow-through structure (59.3 %) (42.1 %) Valuation allowance 0.0 % (13.0 %) Effective income tax rate 5.8 % 1.7 % |
Concentrations (Tables)
Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Revenues [Member] | |
Concentration Risk [Line Items] | |
Concentration of Revenues, Accounts Receivable and Suppliers | For the years ended December 31, 2017 and 2016, the following significant customers had an individual percentage of total revenues equaling 10% or greater: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Customer 1 (related party) 18.70 % 18.33 % Customer 2 18.06 % 11.61 % Totals 36.76 % 29.94 % |
Accounts Receivable [Member] | |
Concentration Risk [Line Items] | |
Concentration of Revenues, Accounts Receivable and Suppliers | At December 31, 2017 and 2016, the following significant customers had a concentration of accounts receivable representing 10% or greater of accounts receivable: December 31, 2017 December 31, 2016 Customer 1 (related party) 24.80 % 25.21 % Customer 2 15.26 % 12.92 % Totals 40.06 % 38.13 % |
Goods Purchased [Member] | |
Concentration Risk [Line Items] | |
Concentration of Revenues, Accounts Receivable and Suppliers | For the years ended December 31, 2017 and 2016, the following significant suppliers represented 10% or greater of goods purchased: For the Year Ended December 31, 2017 For the Year Ended December 31, 2016 Supplier 1 22.34 % 22.36 % Totals 22.34 % 22.36 % |
Nature of Operations - Narrativ
Nature of Operations - Narrative (Detail) - USD ($) | Dec. 29, 2017 | Dec. 19, 2016 | Oct. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Nature Of Operations And Going Concern [Line Items] | |||||
Convertible notes payable - related parties | $ 150,000 | $ 150,000 | |||
Direct offering costs | $ 64,609 | ||||
Net proceeds from sale of common stock | $ 655,391 | ||||
Common Stock Par Value | $ 0.01 | $ 0.01 | |||
CPM [Member] | |||||
Nature Of Operations And Going Concern [Line Items] | |||||
Date of acquisition agreement | Dec. 29, 2017 | ||||
Number of shares issued for acquisition | 50,000,000 | ||||
Common Stock Par Value | $ 0.01 | ||||
Equity interest percentage | 100.00% | ||||
Business acquisition share price | $ 0.20 | ||||
Effective date of acquisition | Dec. 31, 2017 | ||||
NC143 Family Holdings Limited Partnership [Member] | |||||
Nature Of Operations And Going Concern [Line Items] | |||||
Sale of common shares | 5,000,000 | ||||
Gross proceeds from sale of common shares | $ 400,000 | ||||
RMI [Member] | |||||
Nature Of Operations And Going Concern [Line Items] | |||||
Sale of common shares | 4,000,000 | ||||
Gross proceeds from sale of common shares | $ 320,000 | ||||
10% Convertible Promissory Notes [Member] | |||||
Nature Of Operations And Going Concern [Line Items] | |||||
Convertible notes payable - related parties | $ 150,000 | ||||
Interest rate of promissory notes | 10.00% | ||||
Conversion price of common stock | $ 0.08 | ||||
10% Convertible Promissory Notes [Member] | NC143 Family Holdings Limited Partnership [Member] | |||||
Nature Of Operations And Going Concern [Line Items] | |||||
Convertible notes payable - related parties | $ 100,000 | ||||
10% Convertible Promissory Notes [Member] | RMI [Member] | |||||
Nature Of Operations And Going Concern [Line Items] | |||||
Convertible notes payable - related parties | $ 50,000 |
Significant Accounting Polici29
Significant Accounting Policies - (Narrative) (Detail) | 12 Months Ended | |
Dec. 31, 2017USD ($)Segmentshares | Dec. 31, 2016USD ($)shares | |
Significant Accounting Policies [Line Items] | ||
Outstanding common stock equivalents included with diluted net earnings per share | shares | 700,000 | |
Options to purchase included in common stock equivalents | shares | 1,302,052 | 1,304,788 |
Earn-out liability | $ 19,244,543 | |
Cash equivalents | 0 | $ 0 |
FDIC insurance limit | 250,000 | |
Deposits greater than federally insured limit | 537,388 | 421,636 |
Goodwill impairment | 0 | $ 0 |
Liabilities for uncertain tax positions, current | 0 | |
liabilities for uncertain tax positions, noncurrent | $ 0 | |
Number of reportable segments | Segment | 1 | |
CPM [Member] | ||
Significant Accounting Policies [Line Items] | ||
Earn-out liability | $ 19,244,543 | |
Earn-out payment base amount | $ 16,000,000 | |
Earn-out payment start date | Jan. 1, 2018 | |
Earn-out payment end date | Dec. 31, 2034 | |
Earn-out payment additional bonus amount | $ 10,000,000 | |
Discount rate on fair value earn-out liability | 4.00% | |
Approximate gross profit margin included in earn-out liability | 48.00% | |
Average net income margin included in earn-out liability | 9.00% | |
Approximate growth rate used to calculate in earn-out liability | 5.00% | |
Earn-out liability forecast horizon period | 11 years | |
CPM [Member] | Minimum [Member] | ||
Significant Accounting Policies [Line Items] | ||
Earn-out payment during earn-out period | $ 0 | |
CPM [Member] | Maximum [Member] | ||
Significant Accounting Policies [Line Items] | ||
Earn-out payment during earn-out period | $ 26,000,000 |
Significant Accounting Polici30
Significant Accounting Policies - Estimated Useful Lives of Assets (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Computer equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of the assets | 3 years |
Furniture and fixtures [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of the assets | 3 years |
Office equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of the assets | 3 years |
Software [Member] | |
Property Plant And Equipment [Line Items] | |
Estimated useful lives of the assets | 3 years |
Acquisition - Narrative (Detail
Acquisition - Narrative (Detail) | Dec. 29, 2017USD ($)$ / sharesshares | Dec. 19, 2016USD ($)shares | Oct. 19, 2016 | Aug. 23, 2016 | Jul. 15, 2016 | Oct. 31, 2016USD ($)Loan$ / shares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)Segment$ / sharesshares |
Business Acquisition [Line Items] | ||||||||
Notes payable - related parties | $ 150,000 | $ 150,000 | ||||||
Direct offering costs | $ 64,609 | |||||||
Net proceeds from sale of common stock | 655,391 | |||||||
Percentage of common stock issued | 61.40% | |||||||
Percentage of common stock outstanding | 61.40% | |||||||
Goodwill | $ 820,000 | $ 820,650 | $ 820,650 | |||||
Common Stock Par Value | $ / shares | $ 0.01 | $ 0.01 | ||||||
Adjustment of supplemental pro forma earnings | $ (26,111,382) | |||||||
Number of shares outstanding calculated the net (loss) per common share - basic | shares | 16,027,794 | 7,185,890 | ||||||
Number of operating segments | Segment | 1 | |||||||
CPM [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Date of acquisition agreement | Dec. 29, 2017 | |||||||
Number of shares issued for acquisition | shares | 50,000,000 | |||||||
Common Stock Par Value | $ / shares | $ 0.01 | |||||||
Equity interest percentage | 100.00% | |||||||
Share price | $ / shares | $ 0.20 | |||||||
Effective date of acquisition | Dec. 31, 2017 | |||||||
Acquisition additional one-time costs | $ 200,000 | |||||||
Fair value of earn-out payments | $ 19,244,543 | |||||||
Adjustment of supplemental pro forma earnings | $ (25,647,353) | |||||||
Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of common shares | shares | 9,000,000 | |||||||
Common Stock [Member] | CPM [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of shares issued for acquisition | shares | 50,000,000 | |||||||
Common Stock Par Value | $ / shares | $ 0.01 | |||||||
Equity interest percentage | 100.00% | |||||||
Share price | $ / shares | $ 0.20 | |||||||
Post-closing adjustment will be paid in shares | $ 397,463 | |||||||
Period for post- closing adjustment payment | 120 days | |||||||
NC143 Family Holdings Limited Partnership [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of common shares | shares | 5,000,000 | |||||||
Gross proceeds from sale of common shares | $ 400,000 | |||||||
NC143 Family Holdings Limited Partnership [Member] | Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of common shares | shares | 5,000,000 | |||||||
Gross proceeds from sale of common shares | $ 400,000 | |||||||
RMI [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of common shares | shares | 4,000,000 | |||||||
Gross proceeds from sale of common shares | $ 320,000 | |||||||
RMI [Member] | Common Stock [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Sale of common shares | shares | 4,000,000 | |||||||
Gross proceeds from sale of common shares | $ 320,000 | |||||||
NC 143 Family Holdings, LP and RMI [Member] | CPM [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Percentage of common stock outstanding | 90.40% | |||||||
ProForma Adjustments [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Adjustment of supplemental pro forma earnings | $ 103,578 | |||||||
10% Promissory Notes [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of loans obtained | Loan | 3 | |||||||
Notes payable - related parties | $ 150,000 | |||||||
Interest rate of promissory notes | 10.00% | 10.00% | 10.00% | 10.00% | ||||
Conversion price of common stock | $ / shares | $ 0.08 | |||||||
10% Promissory Notes [Member] | NC143 Family Holdings Limited Partnership [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Notes payable - related parties | $ 100,000 | |||||||
10% Promissory Notes [Member] | RMI [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Notes payable - related parties | $ 50,000 |
Acquisition - Unaudited Pro For
Acquisition - Unaudited Pro Forma Information (Detail) | 12 Months Ended |
Dec. 31, 2016USD ($)$ / shares | |
Business Acquisition Pro Forma Information [Line Items] | |
Revenue | $ 26,111,382 |
Net (loss) income | $ 2,449,361 |
Net (loss) income per common share - basic | $ / shares | $ 0.34 |
ProForma Adjustments [Member] | |
Business Acquisition Pro Forma Information [Line Items] | |
Revenue | $ (103,578) |
Historical Fuse Medical, Inc [Member] | |
Business Acquisition Pro Forma Information [Line Items] | |
Revenue | 567,607 |
Net (loss) income | (585,935) |
CPM [Member] | |
Business Acquisition Pro Forma Information [Line Items] | |
Revenue | 25,647,353 |
Net (loss) income | $ 3,035,296 |
Property and Equipment (Detail)
Property and Equipment (Detail) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 26,960 | $ 85,838 |
Less: accumulated depreciation | (10,065) | (71,091) |
Property and equipment, net | 16,895 | 14,747 |
Computer equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 29,290 | |
Furniture and fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 5,047 | 6,347 |
Leasehold improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | 6,728 | |
Office equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 21,913 | 9,221 |
Software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, gross | $ 34,252 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Sale of property and equipment | $ 607 | |
Proceeds from the disposal of property and equipment | 300 | |
Retired fixed assets no longer use with net book value | 3,058 | |
Proceeds from insurance settlement for fully depreciated fixed asset | 8,732 | |
Depreciation expense | $ 14,521 | $ 19,091 |
Revolving Line of Credit - Narr
Revolving Line of Credit - Narrative (Detail) - CPM [Member] - USD ($) | Dec. 29, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Date of acquisition agreement | Dec. 29, 2017 | ||
Effective date of acquisition | Dec. 31, 2017 | ||
Senior Secured Revolving Credit Facility [Member] | ZB, N.A. (d/b/a Amegy Bank) [Member] | |||
Debt Instrument [Line Items] | |||
Line of credit maximum borrowing capacity | $ 5,000,000 | ||
RLOC [Member] | ZB, N.A. (d/b/a Amegy Bank) [Member] | |||
Debt Instrument [Line Items] | |||
Date of acquisition agreement | Dec. 29, 2017 | ||
Effective date of acquisition | Dec. 31, 2017 | ||
Effective rate | 4.56% | ||
Variable rate, description | one-month LIBOR rate plus 3.00% | ||
Variable rate | 3.00% | ||
Percentage of guarantees of outstanding loan amount | 50.00% | ||
Line of credit outstanding balance amount | $ 3,415,351 | $ 3,305,347 | |
Interest expense | $ 134,668 | $ 133,334 |
Notes Payable - Related Parti36
Notes Payable - Related Parties - Narrative (Detail) - USD ($) | Oct. 19, 2016 | Aug. 23, 2016 | Jul. 15, 2016 | Oct. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||
Convertible notes payable - related parties | $ 150,000 | $ 150,000 | ||||
Aggregate amount of beneficial conversion feature | $ 117,500 | |||||
Interest expense on notes payable | 27,000 | 13,587 | ||||
Amortization of beneficial conversion feature | 13,094 | |||||
Accrued expenses [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Accrued interest payable | $ 32,096 | $ 5,096 | ||||
10% Promissory Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Convertible notes payable - related parties | $ 150,000 | |||||
Interest rate of promissory notes | 10.00% | 10.00% | 10.00% | 10.00% | ||
Debt Instrument, description | Principal shall be due and payable, upon demand of the payee. Notwithstanding, at the holder's sole discretion, the holder has the right to convert all or any portion of the then unpaid principal and interest balance into shares of the Company's common stock | |||||
Conversion price of common stock | $ 0.08 |
Notes Payable - Related Parti37
Notes Payable - Related Parties (Detail) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Oct. 31, 2016 |
Debt Instrument [Line Items] | |||
Total notes payable | $ 150,000 | $ 150,000 | |
Less: current maturities | (150,000) | (150,000) | |
Amount due after one year | 0 | 0 | |
10% Promissory Notes [Member] | |||
Debt Instrument [Line Items] | |||
Less: current maturities | $ (150,000) | ||
10% Promissory Notes [Member] | Originating July 15, 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | 50,000 | 50,000 | |
10% Promissory Notes [Member] | Originating August 23, 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | 50,000 | 50,000 | |
10% Promissory Notes [Member] | Originating October 19, 2016 [Member] | |||
Debt Instrument [Line Items] | |||
Total notes payable | $ 50,000 | $ 50,000 |
Notes Payable - Related Parti38
Notes Payable - Related Parties (Parenthetical) (Detail) | Oct. 19, 2016 | Aug. 23, 2016 | Jul. 15, 2016 | Oct. 31, 2016 |
10% Promissory Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate of promissory notes | 10.00% | 10.00% | 10.00% | 10.00% |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Commitments And Contingencies [Line Items] | ||
Loss contingency, complaint filing date | January 27, 2014 | |
Loss contingency, name of plaintiff | M. Richard Cutler and Cutler Law Group, P.C. | |
Loss contingency, name of defendants | Fuse, Alan Meeker, Rusty Shelton, Jonathan Brown, Robert H. Donehew and Golf Rounds.com, Inc. | |
Loss contingency, date of complaint dismissal | Apr. 21, 2014 | |
Plaintiffs claim Defendants for damages | $ 46,465 | |
Lease termination date | Dec. 31, 2017 | |
Operating lease requires monthly payments | $ 14,000 | |
Office Equipment One [Member] | ||
Commitments And Contingencies [Line Items] | ||
Operating lease expiration month and year | 2019-03 | |
Office Equipment Two [Member] | ||
Commitments And Contingencies [Line Items] | ||
Operating lease expiration month and year | 2021-02 | |
Office Equipment Leases [Member] | ||
Commitments And Contingencies [Line Items] | ||
Operating lease requires monthly payments | $ 779 | |
Selling, General, Administrative and Other Expenses [Member] | ||
Commitments And Contingencies [Line Items] | ||
Annual rent expense | 142,000 | $ 120,000 |
Selling, General, Administrative and Other Expenses [Member] | Office Equipment Leases [Member] | ||
Commitments And Contingencies [Line Items] | ||
Annual rent expense | $ 11,000 | $ 8,000 |
PH Squared, LLC for Breach of Contract [Member] | Pending Litigation [Member] | ||
Commitments And Contingencies [Line Items] | ||
Loss contingency, complaint filing date | November 18, 2015 | |
Loss contingency, scheduled trial date | May 1, 2017 | |
Loss contingency, postponed trial date | Jul. 24, 2017 |
Commitments and Contingencies40
Commitments and Contingencies - Summary of Operating Leases (Detail) | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 9,000 |
2,019 | 5,000 |
2,020 | 3,000 |
2,021 | 500 |
Total | $ 17,500 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Detail) - USD ($) | Dec. 29, 2017 | Dec. 14, 2017 | Sep. 21, 2017 | Dec. 19, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2016 | Oct. 04, 2017 | Apr. 05, 2017 |
Class Of Stock [Line Items] | |||||||||
Common Stock Shares Authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Common Stock Par Value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Preferred Stock Shares Authorized | 20,000,000 | 20,000,000 | 20,000,000 | ||||||
Preferred Stock Par Value | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Direct offering costs | $ 64,609 | ||||||||
Net proceeds from sale of common stock | $ 655,391 | ||||||||
Weighted-average grant-date fair value of options granted during the year | $ 0.09 | ||||||||
Stock Option [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Stock options | 0 | ||||||||
Restricted Stock Award [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Fair market value of each common stock | $ 0.56 | ||||||||
Number of common stock granted | 3,267,500 | ||||||||
2017 Plan [Member] | Restricted Stock Award [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares of common stock authorized for issuance | 325,000 | ||||||||
Fair market value of each common stock | $ 0.78 | ||||||||
Vesting description | Fully vest upon the one-year anniversary of the date of grant or September 21, 2018. | ||||||||
Vesting period of RSA | 1 year | ||||||||
Number of common stock granted | 2,000,000 | ||||||||
2017 Plan [Member] | Restricted Stock Award [Member] | Each Member of Board [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Unrecognized compensation expenses | $ 43,336 | ||||||||
2017 Plan [Member] | Restricted Stock Award [Member] | Each Member of Board [Member] | Selling, General and Administrative Expenses [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Share-based compensation expense | 21,664 | ||||||||
2017 Plan [Member] | Restricted Stock Award [Member] | Independent Directors [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Share-based compensation expense | 0 | ||||||||
NC143 Family Holdings Limited Partnership [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Sale of common shares | 5,000,000 | ||||||||
Gross proceeds from sale of common shares | $ 400,000 | ||||||||
RMI [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Sale of common shares | 4,000,000 | ||||||||
Gross proceeds from sale of common shares | $ 320,000 | ||||||||
Common Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Sale of common shares | 9,000,000 | ||||||||
Common Stock [Member] | 2017 Plan [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares of common stock authorized for issuance | 2,500,000 | 4,500,000 | 1,500,000 | ||||||
Common Stock [Member] | 2017 Plan [Member] | Restricted Stock Award [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of common stock granted | 942,500 | ||||||||
Common Stock [Member] | 2017 Plan [Member] | Restricted Stock Award [Member] | Each Member of Board [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Fair market value of each common stock | $ 0.20 | ||||||||
Unrecognized compensation expenses | 167,555 | ||||||||
Number of common stock granted | 188,500 | ||||||||
Common Stock [Member] | 2017 Plan [Member] | Restricted Stock Award [Member] | Each Member of Board [Member] | Selling, General, Administrative and Other Expenses [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Share-based compensation expense | $ 20,945 | ||||||||
Common Stock [Member] | NC143 Family Holdings Limited Partnership [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Sale of common shares | 5,000,000 | ||||||||
Gross proceeds from sale of common shares | $ 400,000 | ||||||||
Common Stock [Member] | RMI [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Sale of common shares | 4,000,000 | ||||||||
Gross proceeds from sale of common shares | $ 320,000 | ||||||||
Common Stock [Member] | Mark W. Brooks and Christopher C. Reeg [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Direct offering costs | 64,609 | ||||||||
Net proceeds from sale of common stock | $ 655,391 | ||||||||
CPM [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Common Stock Par Value | $ 0.01 | ||||||||
Date of acquisition agreement | Dec. 29, 2017 | ||||||||
Number of shares issued for acquisition | 50,000,000 | ||||||||
Equity interest percentage | 100.00% | ||||||||
Share price | $ 0.20 | ||||||||
Effective date of acquisition | Dec. 31, 2017 | ||||||||
CPM [Member] | Common Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Common Stock Par Value | $ 0.01 | ||||||||
Number of shares issued for acquisition | 50,000,000 | ||||||||
Equity interest percentage | 100.00% | ||||||||
Share price | $ 0.20 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Compensation Expense for Stock Options Granted to Employees (Detail) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Expected term (years) | 2 years 6 months | |
Expected volatility | 0.00% | 162.00% |
Weighted-average volatility | 0.00% | 162.00% |
Risk-free interest rate | 0.00% | 1.43% |
Dividend yield | 0.00% | 0.00% |
Stockholders' Equity - Summar43
Stockholders' Equity - Summary of Stock Option Activity (Detail) | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
No. of shares, Abstract | |
No. of Shares, Beginning Balance | shares | 1,304,788 |
Expired, No. Of Shares | shares | (2,736) |
No. of Shares, Ending Balance | shares | 1,302,052 |
Exercisable, No. Of Shares | shares | 1,302,052 |
Weighted average exercise price, Abstract | |
Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 0.22 |
Expired, Weighted Average Exercise Price | $ / shares | 12.13 |
Weighted Average Exercise Price, Ending Balance | $ / shares | 0.20 |
Exercisable, Weighted Average Exercise Price | $ / shares | $ 0.20 |
Weighted average remaining contractual term, Abstract | |
Weighted Average Remaining Contractual Term, Balance outstanding | 3 years 3 months 18 days |
Weighted Average Remaining Contractual Term, Exercisable | 3 years 3 months 18 days |
Aggregate intrinsic value, Abstract | |
Aggregate Intrinsic Value, Balance outstanding | $ | $ 1,717,000 |
Aggregate Intrinsic Value, Exercisable | $ | $ 1,717,000 |
Stockholders' Equity - Summar44
Stockholders' Equity - Summary of Restricted Common Stock Activity (Detail) - Restricted Stock Award [Member] | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Number of common stock granted | shares | 3,267,500 |
Number of Shares, Non-vested, Ending Balance | shares | 3,267,500 |
Share-based Compensation Arrangement by Share Based Payment Award, Equity Instruments Other than Options, Nonvested, Fair Value [Abstract] | |
Fair Value,Granted | $ | $ 1,813,500 |
Fair Value, Non-vested, Ending Balance | $ | $ 1,813,500 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted Average Grant Date Fair Value,Granted | $ / shares | $ 0.56 |
Weighted Average Grant Date Fair Value, Non-vested, Ending Balance | $ / shares | $ 0.56 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Current: | ||
Federal | $ 0 | $ 0 |
State | 40,818 | 51,627 |
Total | 40,818 | 51,627 |
Deferred: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total | 0 | 0 |
Total Income tax expense (benefit) | $ 40,818 | $ 51,627 |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Deferred Income Tax Assets and Liabilities ( (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred tax assets: | ||
Net operating loss carryover | $ 172,704 | $ 224,381 |
Intangibles | 40,342 | |
Accounts receivable | 81,927 | |
Compensation | 57,458 | 80,850 |
Inventory | 25,792 | |
Total deferred tax assets | 378,223 | 305,231 |
Deferred tax liabilities: | ||
Prepaid expenses | 0 | 0 |
Property and equipment | (2,945) | |
Total deferred tax liabilities | (2,945) | |
Property and equipment | 2,795 | |
Total deferred tax liabilities | 2,795 | |
Deferred tax assets, net | 375,278 | 308,026 |
Valuation allowance: | ||
Beginning of year | (308,026) | (700,713) |
(Increase) decrease during year | 308,026 | 392,687 |
Ending balance | (308,026) | |
Net deferred tax asset | $ 375,278 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Income Tax Disclosure [Abstract] | |
Net operating loss carryforwards | $ 822,399 |
Net operating loss carryforwards earliest expiration year | 2,018 |
Net operating loss carryforwards latest expiration year | 2,037 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Computed at U.S. Statutory Rate to Effective Income Tax Rate (Detail) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Statutory U.S. federal income tax rate | 35.00% | 35.00% |
State income taxes, net of federal tax benefit | 5.80% | 1.70% |
Permanent differences | 3.80% | 0.30% |
Other reconciling items | 20.50% | 19.80% |
LLC flow-through structure | (59.30%) | (42.10%) |
Valuation allowance | 0.00% | (13.00%) |
Effective income tax rate | 5.80% | 1.70% |
Concentrations - Significant Cu
Concentrations - Significant Customers with Individual Percentage of Total Revenues Equaling 10% or Greater (Detail) - Revenues [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 36.76% | 29.94% |
Customer 1 (Related Party) [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 18.70% | 18.33% |
Customer 2 [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 18.06% | 11.61% |
Concentrations - Significant 50
Concentrations - Significant Customers with Concentration of Accounts Receivable Representing 10% or Greater (Detail) - Accounts Receivable [Member] - Customer Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 40.06% | 38.13% |
Customer 1 (Related Party) [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 24.80% | 25.21% |
Customer 2 [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 15.26% | 12.92% |
Concentrations - Significant Su
Concentrations - Significant Suppliers Represented 10% or Greater of Goods Purchased (Detail) - Goods Purchased [Member] - Supplier Concentration Risk [Member] | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.34% | 22.36% |
Supplier 1 [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 22.34% | 22.36% |
Related Party Transactions - Na
Related Party Transactions - Narrative (Detail) | Dec. 29, 2017$ / sharesshares | Oct. 31, 2016USD ($)$ / shares | Dec. 31, 2017USD ($)ft²Stockholder$ / shares | Dec. 31, 2016USD ($)$ / shares | Mar. 26, 2018FullTimeEquivalent |
Related Party Transaction [Line Items] | |||||
Notes issued to related party | $ 150,000 | $ 150,000 | |||
Number of primary stockholders | Stockholder | 2 | ||||
Percentage of common stock issued | 61.40% | ||||
Percentage of common stock outstanding | 61.40% | ||||
Common stock par value per share | $ / shares | $ 0.01 | $ 0.01 | |||
Lease termination date | Dec. 31, 2017 | ||||
Net sales to related parties | $ 1,055,000 | $ 396,000 | |||
Purchases from related parties | 128,000 | 8,000 | |||
Account Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 169,000 | 159,000 | |||
Commission [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense incurred on behalf of related parties | 248,000 | 702,000 | |||
Selling, General and Administrative Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense incurred on behalf of related parties | $ 33,000 | 114,000 | |||
CPM [Member] | |||||
Related Party Transaction [Line Items] | |||||
Date of acquisition agreement | Dec. 29, 2017 | ||||
Number of shares issued for acquisition | shares | 50,000,000 | ||||
Common stock par value per share | $ / shares | $ 0.01 | ||||
Equity interest percentage | 100.00% | ||||
Share price | $ / shares | $ 0.20 | ||||
Effective date of acquisition | Dec. 31, 2017 | ||||
1565 North Central Expressway, LP [Member] | |||||
Related Party Transaction [Line Items] | |||||
Area of leased property | ft² | 11,500 | ||||
Lease termination date | Dec. 31, 2017 | ||||
AmBio Staffing, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | $ 112,000 | 107,000 | |||
AmBio Staffing, LLC [Member] | Selling, General and Administrative Expenses [Member] | |||||
Related Party Transaction [Line Items] | |||||
Fees paid for services | 162,000 | 162,000 | |||
AmBio Staffing, LLC [Member] | Subsequent Event [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of full time equivalents supporting operations | FullTimeEquivalent | 74 | ||||
Number of full time equivalents directly supporting company | FullTimeEquivalent | 42 | ||||
Number of full time equivalents supporting other companies | FullTimeEquivalent | 19 | ||||
Number of full time equivalents shares with other companies | FullTimeEquivalent | 13 | ||||
MedUSA Group, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Net sales to related parties | 5,054,000 | 4,797,000 | |||
MedUSA Group, LLC [Member] | Account Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 1,684,000 | 1,752,000 | |||
MedUSA Group, LLC [Member] | Commission [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense incurred on behalf of related parties | 962,000 | 642,000 | |||
Texas Overlord, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Net sales to related parties | 1,953,000 | 0 | |||
Texas Overlord, LLC [Member] | Account Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 444,000 | 0 | |||
Texas Overlord, LLC [Member] | Commission [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense incurred on behalf of related parties | 101,000 | 0 | |||
N.B.M.J., Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Net sales to related parties | 162,000 | 715,000 | |||
N.B.M.J., Inc. [Member] | Account Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 0 | 47,000 | |||
N.B.M.J., Inc. [Member] | Commission [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense incurred on behalf of related parties | 0 | 0 | |||
Maxim Surgical, LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Net sales to related parties | 202,000 | 164,000 | |||
Purchases from related parties | 468,000 | 458,000 | |||
Maxim Surgical, LLC [Member] | Account Receivables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due from related parties | 50,000 | 45,000 | |||
Maxim Surgical, LLC [Member] | Account Payables [Member] | |||||
Related Party Transaction [Line Items] | |||||
Due to related parties | 93,000 | 102,000 | |||
Sintu, LLC [Member] | Commission [Member] | |||||
Related Party Transaction [Line Items] | |||||
Expense incurred on behalf of related parties | $ 1,114,000 | $ 692,000 | |||
10% Convertible Promissory Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notes issued to related party | $ 150,000 | ||||
Interest rate of promissory notes | 10.00% | ||||
Conversion price of common stock | $ / shares | $ 0.08 | ||||
Debt Instrument, description | due and payable, upon demand of the payee. The Notes were issued as follows: $100,000 to NC 143 Family Holdings, LP, a family limited partnership controlled by Mark W. Brooks (“NC 143”), our Chairman of the Board of Directors (the “Board”); and $50,000 to Reeg Medical Industries, Inc., an investment holding company owned and controlled by Christopher C. Reeg, our Chief Executive Officer (“RMI”, and together with NC 143, the “Investors”). The Investors have the sole discretion and right to convert all or any portion of the then unpaid principal and interest balance of the Notes into shares of our common stock at a conversion price of $0.08 per share. | ||||
10% Convertible Promissory Notes [Member] | NC143 Family Holdings Limited Partnership [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notes issued to related party | $ 100,000 | ||||
10% Convertible Promissory Notes [Member] | RMI [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notes issued to related party | $ 50,000 |
Subsequent Events (Narrative) -
Subsequent Events (Narrative) - Collaborative Arrangement (Detail) - Collaborative Arrangement - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Subsequent Event [Line Items] | ||
Distribution Term | 2 years | |
Prior notice for agreement termination term | 90 days | |
Revenue from sales and distribution | $ 4.3 | $ 4.9 |
Percentage of total revenues | 16.00% | 19.00% |