Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 10, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-39678 | |
Entity Registrant Name | SANARA MEDTECH INC. | |
Entity Central Index Key | 0000714256 | |
Entity Tax Identification Number | 59-2219994 | |
Entity Incorporation, State or Country Code | TX | |
Entity Address, Address Line One | 1200 Summit Ave | |
Entity Address, Address Line Two | Suite 414 | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76102 | |
City Area Code | (817) | |
Local Phone Number | 529-2300 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | SMTI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,625,201 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash | $ 2,828,234 | $ 5,147,216 |
Royalty receivable | 49,344 | |
Inventory, net | 4,229,150 | 4,717,533 |
Prepaid and other assets | 911,594 | 608,411 |
Total current assets | 17,186,779 | 19,005,869 |
Long-term assets | ||
Intangible assets, net | 43,953,610 | 44,926,061 |
Goodwill | 3,601,781 | 3,601,781 |
Investment in equity securities | 3,084,278 | 3,084,278 |
Right of use assets – operating leases | 1,894,687 | 1,995,204 |
Property and equipment, net | 1,190,805 | 1,257,956 |
Total long-term assets | 53,725,161 | 54,865,280 |
Total assets | 70,911,940 | 73,871,149 |
Current liabilities | ||
Accrued bonuses and commissions | 6,893,381 | 7,676,770 |
Accrued royalties and expenses | 2,288,428 | 2,047,678 |
Earnout liabilities – current | 979,488 | 1,100,000 |
Current portion of debt | 928,571 | 580,357 |
Operating lease liabilities – current | 377,273 | 361,185 |
Total current liabilities | 12,746,073 | 13,767,877 |
Long-term liabilities | ||
Long-term debt, net of current portion | 8,767,991 | 9,113,123 |
Earnout liabilities – long-term | 2,777,835 | 2,723,001 |
Operating lease liabilities – long-term | 1,626,130 | 1,737,445 |
Other long-term liabilities | 1,982,345 | 1,941,686 |
Total long-term liabilities | 15,154,301 | 15,515,255 |
Total liabilities | 27,900,374 | 29,283,132 |
Commitments and contingencies (Note 8) | ||
Shareholders’ equity | ||
Common Stock: $0.001 par value, 20,000,000 shares authorized; 8,622,739 issued and outstanding as of March 31, 2024 and 8,535,239 issued and outstanding as of December 31, 2023 | 8,623 | 8,535 |
Additional paid-in capital | 73,180,208 | 72,860,556 |
Accumulated deficit | (29,898,146) | (28,036,814) |
Total Sanara MedTech shareholders’ equity | 43,290,685 | 44,832,277 |
Equity attributable to noncontrolling interest | (279,119) | (244,260) |
Total shareholders’ equity | 43,011,566 | 44,588,017 |
Total liabilities and shareholders’ equity | 70,911,940 | 73,871,149 |
Nonrelated Party [Member] | ||
Current assets | ||
Accounts receivable | 9,194,799 | 8,474,965 |
Current liabilities | ||
Accounts payable | 1,191,816 | 1,924,082 |
Related Party [Member] | ||
Current assets | ||
Accounts receivable | 23,002 | 8,400 |
Current liabilities | ||
Accounts payable | $ 87,116 | $ 77,805 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 20,000,000 | 20,000,000 |
Common stock, shares issued | 8,622,739 | 8,535,239 |
Common stock, shares outstanding | 8,622,739 | 8,535,239 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Statement [Abstract] | ||
Net Revenue | $ 18,536,638 | $ 15,521,917 |
Cost of goods sold | 1,890,046 | 2,125,659 |
Gross profit | 16,646,592 | 13,396,258 |
Operating expenses | ||
Selling, general and administrative expenses | 16,192,259 | 12,969,069 |
Research and development | 946,298 | 1,317,324 |
Depreciation and amortization | 1,105,420 | 778,875 |
Change in fair value of earnout liabilities | (65,678) | (452,687) |
Total operating expenses | 18,178,299 | 14,612,581 |
Operating loss | (1,531,707) | (1,216,323) |
Other expense | ||
Interest expense and other | (267,336) | (6) |
Total other expense | (267,336) | (6) |
Net loss | (1,799,043) | (1,216,329) |
Less: Net loss attributable to noncontrolling interest | (34,859) | (38,429) |
Net loss attributable to Sanara MedTech shareholders | $ (1,764,184) | $ (1,177,900) |
Net loss per share of common stock, basic | $ (0.21) | $ (0.14) |
Net loss per share of common stock, diluted | $ (0.21) | $ (0.14) |
Weighted average number of common shares outstanding, basic | 8,419,528 | 8,173,784 |
Weighted average number of common shares outstanding, diluted | 8,419,528 | 8,173,784 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2022 | $ 8,300 | $ 65,213,987 | $ (23,394,757) | $ (107,555) | $ 41,719,975 |
Balance, shares at Dec. 31, 2022 | 8,299,957 | ||||
Share-based compensation | $ 75 | 597,230 | 597,305 | ||
Share-based compensation, shares | 74,781 | ||||
Net settlement and retirement of equity-based awards | $ (16) | (315,572) | (340,354) | (655,942) | |
Net settlement and retirement of equity-based awards, shares | (15,854) | ||||
Issuance of common stock in equity offering | $ 26 | 1,033,735 | 1,033,761 | ||
Issuance of common stock in equity offering, shares | 26,143 | ||||
Net loss | (1,177,900) | (38,429) | (1,216,329) | ||
Balance at Mar. 31, 2023 | $ 8,385 | 66,529,380 | (24,913,011) | (145,984) | 41,478,770 |
Balance, shares at Mar. 31, 2023 | 8,385,027 | ||||
Balance at Dec. 31, 2022 | $ 8,300 | 65,213,987 | (23,394,757) | (107,555) | 41,719,975 |
Balance, shares at Dec. 31, 2022 | 8,299,957 | ||||
Balance at Dec. 31, 2023 | $ 8,535 | 72,860,556 | (28,036,814) | (244,260) | 44,588,017 |
Balance, shares at Dec. 31, 2023 | 8,535,239 | ||||
Share-based compensation | $ 101 | 803,285 | 803,386 | ||
Share-based compensation, shares | 100,662 | ||||
Net settlement and retirement of equity-based awards | $ (13) | (483,633) | (97,148) | (580,794) | |
Net settlement and retirement of equity-based awards, shares | (13,162) | ||||
Net loss | (1,764,184) | (34,859) | (1,799,043) | ||
Balance at Mar. 31, 2024 | $ 8,623 | $ 73,180,208 | $ (29,898,146) | $ (279,119) | $ 43,011,566 |
Balance, shares at Mar. 31, 2024 | 8,622,739 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (1,799,043) | $ (1,216,329) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,105,420 | 778,875 |
Bad debt expense | 65,000 | 36,000 |
Inventory obsolescence | 95,235 | 30,511 |
Share-based compensation | 803,386 | 597,305 |
Noncash lease expense | 100,517 | 76,545 |
Accretion of finance liabilities | 58,834 | |
Amortization of debt issuance costs | 3,083 | |
Change in fair value of earnout liabilities | (65,678) | (452,687) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (735,490) | 352,102 |
Accounts receivable – related parties | (14,602) | 74,602 |
Inventory, net | 393,148 | 86,785 |
Prepaid and other assets | (303,182) | (361,719) |
Accounts payable | (732,266) | 405,360 |
Accounts payable – related parties | 9,311 | (10,747) |
Accrued royalties and expenses | 300,574 | (112,774) |
Accrued bonuses and commissions | (783,390) | (1,949,325) |
Operating lease liabilities | (95,227) | (75,817) |
Net cash used in operating activities | (1,594,370) | (1,741,313) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (65,818) | (27,705) |
Proceeds from disposal of property and equipment | 650 | |
Net cash used in investing activities | (65,818) | (27,055) |
Cash flows from financing activities: | ||
Equity offering net proceeds | 751,752 | |
Net settlement of equity-based awards | (580,794) | (655,942) |
Cash payment of finance and earnout liabilities | (78,000) | |
Net cash provided by (used in) financing activities | (658,794) | 95,810 |
Net decrease in cash | (2,318,982) | (1,672,558) |
Cash, beginning of period | 5,147,216 | 8,958,995 |
Cash, end of period | 2,828,234 | 7,286,437 |
Cash paid during the period for: | ||
Interest | 205,591 | 6 |
Supplemental noncash investing and financing activities: | ||
Equity offering accrued proceeds | 282,010 | |
Right of use assets obtained in exchange for lease obligations | $ 1,369,164 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure [Table] | ||
Net Income (Loss) | $ (1,764,184) | $ (1,177,900) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
NATURE OF BUSINESS AND BACKGROU
NATURE OF BUSINESS AND BACKGROUND | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND BACKGROUND | NOTE 1 – NATURE OF BUSINESS AND BACKGROUND Sanara MedTech Inc. (together with its wholly owned and majority owned subsidiaries on a consolidated basis, the “Company”) is a medical technology company focused on developing and commercializing transformative technologies to improve clinical outcomes and reduce healthcare expenditures in the surgical, chronic wound and skincare markets. Each of the Company’s products, services and technologies are designed to achieve the Company’s goal of providing better clinical outcomes at a lower overall cost for patients regardless of where they receive care. The Company strives to be one of the most innovative and comprehensive providers of effective surgical, wound and skincare solutions and is continually seeking to expand its offerings for patients requiring treatments across the entire continuum of care in the United States. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Sanara MedTech Inc. and its wholly owned and majority-owned subsidiaries, as well as other entities in which the Company has a controlling financial interest. All significant intercompany profits, losses, transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period. These financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2023 and 2022, which are included in the Company’s most recent Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported revenue and expenses during the reporting period. However, actual results could differ from those estimates and there may be changes to the Company’s estimates in future periods. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Income/Loss Per Share The Company computes income/loss per share in accordance with Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share, which requires the Company to present basic and diluted income per share when the effect is dilutive. Basic income per share is computed by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding. Diluted income per share is computed similarly to basic income per share, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive. All common stock equivalents were excluded from the calculations for the periods presented as their inclusion would have been anti-dilutive during the three months ended March 31, 2024 and 2023 due to the Company’s net loss. The following table summarizes the shares of common stock that were potentially issuable but were excluded from the computation of diluted net loss per share for the three months ended March 31, 2024 and 2023 as such shares would have had an anti-dilutive effect: SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER SHARE As of March 31, 2024 2023 Stock options (a) 90,833 146,191 Warrants (b) 16,725 16,725 Unvested restricted stock 193,217 181,887 Anti-dilutive securities 193,217 181,887 (a) Shares underlying stock options assumed pursuant to the merger agreement with Precision Healing, Inc. (“Precision Healing”) in April 2022. (b) Shares underlying warrants assumed pursuant to the merger agreement with Precision Healing in April 2022. Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when a purchase order is received from the customer and control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for transferring those goods or services. Revenue is recognized based on the following five-step model: - Identification of the contract with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, the Company satisfies a performance obligation Details of this five-step process are as follows: Identification of the contract with a customer Customer purchase orders are generally considered to be contracts under ASC 606. Purchase orders typically identify the specific terms of products to be delivered, create the enforceable rights and obligations of both parties and result in commercial substance. No other forms of contract revenue recognition, such as the completed contract or percentage of completion methods, were utilized by the Company in either 2024 or 2023. Performance obligations The Company’s performance obligation is generally limited to delivery of the requested items to its customers at the agreed upon quantities and prices. Determination and allocation of the transaction price The Company has established prices for its products. These prices are effectively agreed to when customers place purchase orders with the Company. Rebates and discounts, if any, are recognized in full at the time of sale as a reduction of net revenue. Allocation of transaction prices is not necessary where only one performance obligation exists. Recognition of revenue as performance obligations are satisfied Product revenues are recognized when a purchase order is received from the customer, the products are delivered and control of the goods and services passes to the customer. Disaggregation of Revenue Revenue streams from product sales and royalties are summarized below for the three months ended March 31, 2024 and 2023. SCHEDULE OF REVENUE FROM PRODUCT SALES AND ROYALTIES Three Months Ended March 31, 2024 2023 Soft tissue repair products $ 16,082,292 $ 12,872,481 Bone fusion products 2,454,346 2,599,186 Royalty revenue - 50,250 Total Net Revenue $ 18,536,638 $ 15,521,917 Accounts Receivable Allowances Accounts receivable are typically due within 30 days of invoicing. The Company establishes an allowance for doubtful accounts to provide for an estimate of accounts receivable which are not expected to be collectible. The Company bases the allowance on an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and other information as applicable and will record its allowance based on the estimated credit losses. The Company recorded bad debt expense of $ 65,000 36,000 593,030 528,030 3,670 3,820 Inventories Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. Inventories consist primarily of finished goods, and also include an immaterial amount of raw materials and related packaging components. The Company recorded inventory obsolescence expense of $ 95,235 30,511 398,478 446,917 Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets, ranging from two to ten years. Below is a summary of property and equipment for the periods presented: SCHEDULE OF PROPERTY AND EQUIPMENT Useful March 31, December 31, Life 2024 2023 Computers 3 5 $ 215,500 $ 194,788 Office equipment 3 7 214,190 201,785 Furniture and fixtures 5 10 304,338 304,338 Leasehold improvements 2 5 166,871 134,170 Internal use software 5 1,618,999 1,618,999 Property and equipment, gross 2,519,898 2,454,080 Less accumulated depreciation (1,329,093 ) (1,196,124 ) Property and equipment, net $ 1,190,805 $ 1,257,956 Depreciation expense related to property and equipment was $ 132,969 107,674 Internal Use Software The Company accounts for costs incurred to develop or acquire computer software for internal use in accordance with ASC Topic 350-40, Intangibles – Goodwill and Other. The Company capitalizes the costs incurred during the application development stage, which generally includes third-party developer fees to design the software configuration and interfaces, coding, installation and testing. The Company begins capitalization of qualifying costs when both the preliminary project stage is completed and management has authorized further funding for the completion of the project. Costs incurred during the preliminary project stage along with post implementation stages of internal-use computer software are expensed as incurred. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized development costs are classified as “Property and equipment, net” in the Consolidated Balance Sheets and are depreciated over the estimated useful life of the software, which is generally five years. Goodwill The excess of purchase price over the fair value of identifiable net assets acquired in business combinations is recorded as goodwill. As of March 31, 2024 and December 31, 2023, all of the Company’s goodwill relates to the acquisition of Scendia Biologics, LLC (“Scendia”). Goodwill has an indefinite useful life and is not amortized. Goodwill is tested annually as of December 31 for impairment, or more frequently if circumstances indicate impairment may have occurred. The Company may first perform a qualitative assessment to determine if it is more likely than not that the fair value of the reporting unit is less than the respective carrying value. If it is determined that it is more likely than not that a reporting unit’s fair value is less than its carrying value, then the Company will determine the fair value of the reporting unit and record an impairment charge for the difference between fair value and carrying value (not to exceed the carrying amount of goodwill). No impairment was recorded during the three months ended March 31, 2024. Intangible Assets Intangible assets are stated at cost of acquisition less accumulated amortization and impairment loss, if any. Cost of acquisition includes the purchase price and any cost directly attributable to bringing the asset to its working condition for the intended use. The Company amortizes its finite-lived intangible assets on a straight-line basis over the estimated useful life of the respective assets which is generally the life of the related patents or licenses, seven years for customer relationships and five years for assembled workforces. See Note 4 for more information on intangible assets. Impairment of Long-Lived Assets Long-lived assets, including certain identifiable intangibles held and to be used by the Company, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows and the estimated liquidation value of such long-lived assets and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived assets. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, undiscounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated fair value less cost to sell. No impairment was recorded during the three months ended March 31, 2024 and 2023. Investments in Equity Securities The Company’s equity investments consist of nonmarketable equity securities in privately held companies without readily determinable fair values. Unless accounted for under the equity method of accounting, the investments are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company did not have any investments which are recorded applying the equity method of accounting as of March 31, 2024. The Company has reviewed the carrying value of its investments and has determined there was no impairment or observable price changes as of and for the three months ended March 31, 2024 and 2023. Fair Value Measurement As defined in ASC Topic 820, Fair Value Measurement (“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This fair value measurement framework applies at both the initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC 820 are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include nonexchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses, other than acquisition-related expenses, approximate fair value because of the short-term nature of these instruments. The fair value of acquisition-related accrued expenses is categorized as Level 2 of the fair value hierarchy. The value of these instruments has been estimated using discounted cash flow analysis based on the Company’s incremental borrowing rate. The carrying value of the Company’s debt, which has variable interest rates determined each month, approximates fair value based on instruments with similar terms (Level 2 inputs). The fair value of the contingent earnout consideration and the acquisition date fair value of goodwill and intangibles related to the acquisitions discussed in Notes 3 and 4 are based on Level 3 inputs. Liabilities for contingent consideration for the Precision Healing merger, acquisition of Scendia and Applied Asset Purchase (defined below) (see Note 3 for more information) are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred. Subsequent changes in fair value for the Precision Healing and Scendia acquisitions are reported under the line item captioned “Change in fair value of earnout liabilities” in the Company’s Consolidated Statements of Operations. Due to the Applied Asset Purchase being accounted for as an asset acquisition and given that the transaction did not include contingent shares, subsequent revaluations of contingent consideration for the Applied acquisition results in an adjustment to the contingent consideration liability and the intellectual property intangible asset with a cumulative catch-up amortization adjustment. The current year changes in fair value of earnout liabilities below are as a result of a net decrease in the estimated fair value of the earnout liabilities established at the time of the Company’s Precision Healing and Scendia acquisitions. The following table sets forth a summary of the changes in fair value for the Level 3 contingent earnout considerations. SCHEDULE OF CHANGES IN FAIR VALUE FOR CONTINGENT EARNOUT CONSIDERATION Balance at December 31, 2023 $ 3,823,001 Changes in fair value of earnout liabilities (65,678 ) Balance at March 31, 2024 $ 3,757,323 Income Taxes Income taxes are accounted for under the asset and liability method, whereby deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all the deferred tax asset will not be realized. Stock-based Compensation The Company accounts for stock-based compensation to employees and nonemployees in accordance with ASC Topic 718, Compensation – Stock Compensation. Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as expense over the stipulated vesting period, if any. The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and warrants, and the closing price of the Company’s common stock for grants of common stock, including restricted stock awards. Research and Development Costs Research and development (“R&D”) expenses consist of personnel-related expenses, including salaries, stock-based compensation and benefits for all personnel directly engaged in R&D activities, contracted services, materials, prototype expenses and allocated overhead which is comprised of lease expense and other facilities-related costs. R&D expenses include costs related to enhancements to the Company’s currently available products and additional investments in the product and platform development pipeline. The Company expenses R&D costs as incurred. Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). This update amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The Company adopted the new guidance effective January 1, 2023. The adoption did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of incremental segment information on an annual and interim basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company is currently evaluating the effect of this pronouncement on its disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which expands the disclosure required for income taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures. |
APPLIED ASSET PURCHASE
APPLIED ASSET PURCHASE | 3 Months Ended |
Mar. 31, 2024 | |
Applied Asset Purchase | |
APPLIED ASSET PURCHASE | NOTE 3 – APPLIED ASSET PURCHASE On August 1, 2023, the Company entered into an Asset Purchase Agreement (the “Applied Purchase Agreement”) by and among the Company, as guarantor, Sanara MedTech Applied Technologies, LLC, a Texas limited liability company and wholly owned subsidiary of the Company (“SMAT”), The Hymed Group Corporation, a Delaware corporation (“Hymed”), Applied Nutritionals, LLC, a Delaware limited liability company (“Applied”, and together with Hymed, the “Sellers”), and Dr. George D. Petito (the “Owner”), pursuant to which SMAT acquired certain assets of the Sellers and the Owner, including, among others, the Sellers’ and Owner’s inventory, intellectual property, manufacturing and related equipment, goodwill, rights and claims, other than certain excluded assets, all as more specifically set forth in the Applied Purchase Agreement (collectively, the “Applied Purchased Assets”), and assumed certain Assumed Liabilities (as defined in the Applied Purchase Agreement), upon the terms and subject to the conditions set forth in the Applied Purchase Agreement (such transaction, the “Applied Asset Purchase”). The Applied Purchased Assets include the underlying intellectual property of, as well as the rights to manufacture and sell, CellerateRX Surgical Activated Collagen (“CellerateRX Surgical”) and HYCOL Hydrolyzed Collagen (“HYCOL”) products for human wound care use. The Applied Purchased Assets were purchased for an initial aggregate purchase price of $ 15.25 9.75 73,809 3.0 2.5 Prior to the Closing, the Company licensed certain of its products from Applied through a sublicense agreement (the “Sublicense Agreement”) with CGI Cellerate RX, LLC (“CGI Cellerate RX”), a related party (see Note 10 for additional information regarding transactions with related parties). Pursuant to the Sublicense Agreement, the Company has an exclusive, world-wide sublicense to distribute CellerateRX Surgical and HYCOL products into the surgical and wound care markets. In connection with the Applied Asset Purchase, Applied assigned its license agreement with CGI Cellerate RX to SMAT. Since the Closing of the Applied Asset Purchase, Sanara indirectly makes intercompany royalty payments to SMAT at the same rate as set forth in the Sublicense Agreement. Effective August 1, 2023, these intercompany royalty payments and the offsetting cost of goods sold are eliminated on a consolidated basis. In addition to the Cash Closing Consideration, Stock Closing Consideration and Installment Payments, the Applied Purchase Agreement provides that the Sellers are entitled to receive up to an additional $ 10.0 In connection with the Applied Asset Purchase and pursuant to the Applied Purchase Agreement, effective August 1, 2023, the Company entered into a professional services agreement (the “Petito Services Agreement”) with the Owner, pursuant to which the Owner, as an independent contractor, agreed to provide certain services to the Company, including, among other things, assisting with the development of products already in development and assisting with research, development, formulation, invention and manufacturing of any future products (the “Petito Services”). As consideration for the Petito Services, the Owner is entitled to receive: (i) a base salary of $12,000 per month during the term of the Petito Services Agreement, (ii) a royalty payment equal to three percent (3%) of the actual collections from net sales of certain products the Owner develops or co-develops that reach commercialization, (iii) a royalty payment equal to five percent (5%) for the first $50.0 million in aggregate collections from net sales of certain future products and a royalty payment of two and one-half percent (2.5%) on aggregate collections from net sales of certain future products on any amounts exceeding $50.0 million but up to $100.0 million, (iv) $500,000 in cash in the event that 510(k) clearance is issued for any future product accepted by the Company and (v) $1.0 million in cash in the event that a U.S. patent is issued for a certain product; provided that with respect to the incentive payments described in (iv) and (v) of the foregoing, the Owner shall not earn more than $2.5 million. The Petito Services Agreement has an initial term of three years and is subject to automatic successive one-month renewals unless earlier terminated in accordance with its terms. The Petito Services Agreement may be terminated upon the Owner’s death or disability or by the Company or the Owner “For Cause” (as defined in the Petito Services Agreement); provided, however, that the base salary described in (i) of the foregoing paragraph shall survive termination through the three-year initial term and the royalty payments and incentive payments described in (ii)-(v) of the foregoing paragraph shall survive termination of the Petito Services Agreement. As the contingent consideration was negotiated as part of the transfer of assets, the contingent obligation was measured at fair value and included in the total purchase consideration transferred. Accordingly, since the Applied Asset Purchase was accounted for as an asset acquisition and did not include contingent shares, the contingent consideration is classified as a liability at its estimated fair value at each reporting period with subsequent revaluations recognized as an adjustment to the intellectual property intangible asset and the earnout liability with a cumulative catch-up amortization adjustment. The total purchase consideration for the Applied Asset Purchase as determined by the Company was as follows: SCHEDULE OF ASSET PURCHASE CONSIDERATIONS Consideration Equity Shares Dollar Value Cash Closing Consideration $ 9,750,000 Fair value of Stock Closing Consideration 73,809 3,089,645 Fair value of Installment Payments 2,040,808 Cash paid for inventory 30,007 Fair value of Petito Services Agreement defined payments 825,834 Fair value of Petito Services Agreement contingent consideration 893,000 Direct transaction costs 162,743 Total purchase consideration $ 16,792,037 Based on guidance provided by ASC 805, the Company recorded the Applied Asset Purchase as an asset acquisition due to the determination that substantially all the fair value of the assets acquired was concentrated in a group of similar identifiable assets. The Company believes the “substantially all” criterion was met with respect to the acquired intellectual property being the only significant asset acquired. Accordingly, the Company accounted for the transaction as an asset acquisition. The purchase consideration, plus transaction costs, was allocated to the individual assets according to their fair values as a percentage of the total fair value of the assets purchased, with no goodwill recognized. Based on the estimated fair value of the gross assets acquired, the total fair value of the net assets acquired was primarily attributable to, and classified as, finite-lived intellectual property in the third quarter of 2023. The total purchase consideration was allocated based on the relative estimated fair value of such assets as follows: SCHEDULE OF PURCHASE CONSIDERATION ON FAIR VALUE OF ASSETS ACQUIRED Description Amount Inventory $ 30,007 Equipment 33,062 Intellectual property 16,728,968 Net assets acquired $ 16,792,037 |
GOODWILL AND INTANGIBLES, NET
GOODWILL AND INTANGIBLES, NET | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLES, NET | NOTE 4 – GOODWILL AND INTANGIBLES, NET The changes in the carrying amount of the Company’s goodwill were as follows: SCHEDULE OF CHANGES IN THE CARRYING AMOUNT OF THE GOODWILL Total Balance as of December 31, 2022 $ 3,601,781 Acquisitions - Balance as of December 31, 2023 3,601,781 Acquisitions - Balance as of March 31, 2024 $ 3,601,781 The carrying values of the Company’s intangible assets were as follows for the periods presented: SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS March 31, 2024 December 31, 2023 Accumulated Accumulated Cost Amortization Net Cost Amortization Net Amortizable Intangible Assets: Product Licenses $ 4,793,879 $ (1,439,136 ) $ 3,354,743 $ 4,793,879 $ (1,342,626 ) $ 3,451,253 Patents and Other IP 38,570,549 (3,765,198 ) 34,805,351 38,570,549 (3,181,186 ) 35,389,363 Customer relationships and other 7,947,332 (2,153,816 ) 5,793,516 7,947,332 (1,861,887 ) 6,085,445 Total $ 51,311,760 $ (7,358,150 ) $ 43,953,610 $ 51,311,760 $ (6,385,699 ) $ 44,926,061 As of March 31, 2024, the weighted-average amortization period for finite-lived intangible assets was 14.5 972,451 671,201 SCHEDULE OF FUTURE AMORTIZATION EXPENSE Remainder of 2024 $ 2,917,353 2025 3,889,804 2026 3,872,548 2027 3,758,696 2028 3,725,454 2029 3,725,454 Thereafter 22,064,301 Total $ 43,953,610 The Company has reviewed the carrying value of intangible assets and has determined there was no impairment during the three months ended March 31, 2024 or 2023. |
INVESTMENTS IN EQUITY SECURITIE
INVESTMENTS IN EQUITY SECURITIES | 3 Months Ended |
Mar. 31, 2024 | |
Schedule of Investments [Abstract] | |
INVESTMENTS IN EQUITY SECURITIES | NOTE 5 – INVESTMENTS IN EQUITY SECURITIES The Company’s equity investments consist of nonmarketable equity securities in privately held companies without readily determinable fair values. Unless accounted for under the equity method of accounting, the investments are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. In July 2020, the Company made a $ 500,000 7,142,857 2.9 3,571,430 250,000 3,571,429 250,000 8.1 In June 2021, the Company invested $ 2,084,278 278,587 27.3 27.3 93,879 The Company has reviewed the characteristics of the Pixalere Shares in accordance with ASC Topic 323, Investments – Equity Method and Joint Ventures. Due to the substantive liquidation preferences of the Pixalere Shares over Pixalere’s common stock, the Pixalere Shares are not “in-substance” common stock, and therefore, the Company does not utilize the equity method of accounting for this investment. In accordance with ASC Topic 321, Investments - Equity Securities, this investment was reported at cost as of March 31, 2024. The following summarizes the Company’s investments for the periods presented: SCHEDULE OF INVESTMENTS March 31, 2024 December 31, 2023 Carrying Amount Economic Interest Carrying Amount Economic Interest Cost Method Investments Direct Dermatology, Inc. $ 1,000,000 $ 1,000,000 Pixalere Healthcare Inc. 2,084,278 2,084,278 Total Cost Method Investments $ 3,084,278 $ 3,084,278 |
OPERATING LEASES
OPERATING LEASES | 3 Months Ended |
Mar. 31, 2024 | |
Operating Leases | |
OPERATING LEASES | NOTE 6 – OPERATING LEASES The Company periodically enters operating lease contracts for office space and equipment. Arrangements are evaluated at inception to determine whether such arrangements constitute a lease. Right of use assets (“ROU assets”) represent the right to use an underlying asset for the lease term, and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities were recognized on the transition date based on the present value of lease payments over the respective lease term, with the office space ROU asset adjusted for deferred rent liability. The Company has three material operating leases for office space. In March and September of 2023, the Company amended its primary office lease to obtain additional space, as well as extend the term. The leases have remaining lease terms of 81 17 34 In accordance with ASC Topic 842, Leases, the Company has recorded ROU assets of $ 1,894,687 2,003,403 138,798 88,419 133,509 87,691 Maturity of Operating Lease Liabilities SCHEDULE OF OPERATING LEASE LIABILITY March 31, 2024 Remainder of 2024 $ 371,508 2025 532,053 2026 379,529 2027 297,947 2028 295,689 2029 300,158 Thereafter 604,049 Total lease payments 2,780,933 Less imputed interest (777,530 ) Present Value of Lease Liabilities $ 2,003,403 Operating lease liabilities – current $ 377,273 Operating lease liabilities – long-term $ 1,626,130 As of March 31, 2024, the Company’s operating leases had a weighted average remaining lease term of 5.8 7.65 |
DEBT AND CREDIT FACILITIES
DEBT AND CREDIT FACILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Debt And Credit Facilities | |
DEBT AND CREDIT FACILITIES | NOTE 7 – DEBT AND CREDIT FACILITIES Cadence Term Loan In connection with the entry into the Applied Purchase Agreement, on August 1, 2023, SMAT, as borrower, and the Company, as guarantor, entered into a loan agreement (the “Cadence Loan Agreement”) with Cadence Bank (the “Bank”) providing for, among other things, an advancing term loan in the aggregate principal amount of $ 12.0 The proceeds of the advances under the Cadence Loan Agreement were used for working capital and for purposes of financing up to one hundred percent ( 100 9.75 Advances under the Cadence Term Loan were scheduled to begin amortizing in monthly installments commencing on August 5, 2024. All remaining unpaid balances under the Cadence Term Loan were due and payable in full on August 1, 2028 (the “Cadence Loan Maturity Date”). SMAT was permitted to prepay amounts due under the Cadence Term Loan. All accrued but unpaid interest on the unpaid principal balance of outstanding advances was due and payable monthly, beginning on September 5, 2023 and continuing monthly on the fifth day of each month thereafter until the Cadence Loan Maturity Date. The unpaid principal balance of outstanding advances bore interest, subject to certain conditions, at the lesser of the Maximum Rate (as defined in the Cadence Loan Agreement) or the Base Rate, which was for any day, a rate per annum equal to the term secured overnight financing rate (Term SOFR) (as administered by the Federal Reserve Bank of New York) for a one-month tenor in effect on such day plus three percent ( 3.0 The obligations of SMAT under the Cadence Loan Agreement and the other loan documents delivered in connection therewith were guaranteed by the Company and were secured by a first priority security interest in substantially all of the existing and future assets of SMAT. The Cadence Loan Agreement contained customary representations and warranties and certain covenants that limit (subject to certain exceptions) the ability of SMAT and the Company to, among other things, (i) create, assume or guarantee certain liabilities, (ii) create, assume or suffer liens securing indebtedness, (iii) make or permit loans and advances, (iv) acquire any assets outside the ordinary course of business, (v) consolidate, merge or sell all or a material part of its assets, (vi) pay dividends or other distributions on, or redeem or repurchase, interest in an obligor, including the Company, as guarantor (vii) cease, suspend or materially curtail business operations or (viii) engage in certain affiliate transactions. In addition, the Cadence Loan Agreement contained financial covenants that required SMAT to maintain (i) a minimum Debt Services Coverage Ratio of 1.2 to 1.0 as of the last day of each applicable fiscal quarter and (ii) a maximum Cash Flow Leverage Ratio of not more than (a) 4.5 to 1.0 as of the last day of the fiscal quarter ending on September 30, 2023, (b) 4.0 to 1.0 as of the last day of each fiscal quarter ending on December 31, 2023 and March 31, 2024, (c) 3.5 to 1.0 as of the last day of each fiscal quarter ending June 30, 2024 and September 30, 2024 and (d) 3.0 to 1.0 as of the last day of each fiscal quarter thereafter The Cadence Loan Agreement contained customary events of default. If such an event of default occurs, the Bank was entitled to take various actions, including the acceleration of amounts due under the Cadence Loan Agreement and actions permitted to be taken by a secured creditor. The table below presents the components of outstanding debt for the periods presented: As of March 31, 2024 and December 31, 2023, the interest rate on the advance under the Cadence Term Loan was 8.3 SCHEDULE OF LONG-TERM DEBT March 31, December 31, Cadence Term Loan $ 9,750,000 $ 9,750,000 Total debt 9,750,000 9,750,000 Less: debt issuance costs, net of accumulated amortization of $ 8,221 5,138 (53,438 ) (56,520 ) Long-term debt 9,696,562 9,693,480 Less: Current portion of long-term debt 928,571 580,357 Long-term debt $ 8,767,991 $ 9,113,123 The table below presents the aggregate maturities of the Company’s outstanding debt as of March 31, 2024: SCHEDULE OF MATURITIES OUTSTANDING DEBT Year Total Remainder of 2024 $ 580,357 2025 1,625,000 2026 1,950,000 2027 1,950,000 2028 3,644,643 Thereafter - Total debt $ 9,750,000 In connection with the Cadence Term Loan, the Company incurred $ 61,658 53,438 56,520 3,083 zero CRG Term Loan On April 17, 2024, the Company entered into a Term Loan Agreement (the “CRG Loan Agreement”) by and among the Company, as borrower, the subsidiary guarantors party thereto from time to time (collectively, the “Guarantors”), CRG Servicing LLC as administrative agent and collateral agent (the “Agent”), and the lenders party thereto from time to time, providing for a senior secured term loan of up to $ 55.0 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 - COMMITMENTS AND CONTINGENCIES License Agreements and Royalties CellerateRX Surgical In August 2018, the Company entered an exclusive, world-wide sublicense agreement with CGI Cellerate RX, LLC (“CGI Cellerate RX”) to distribute CellerateRX Surgical and HYCOL products into the surgical and wound care markets. Pursuant to the Sublicense Agreement, the Company pays royalties of 3-5% of annual collected net sales of CellerateRX Surgical and HYCOL. As amended in January 2021, the term of the sublicense extends through May 2050, with automatic successive year-to-year renewal terms thereafter so long as the Company’s Net Sales (as defined in the Sublicense Agreement) each year are equal to or in excess of $1,000,000. If the Company’s Net Sales fall below $1,000,000 for any year after the expiration date, CGI Cellerate RX has the right to terminate the Sublicense Agreement upon written notice. Under this agreement, royalty expense, which is recorded in “Cost of goods sold” in the accompanying Consolidated Statements of Operations, totaled zero 520,814 As discussed further in Note 3, on August 1, 2023, the Company purchased certain assets from Applied, including the rights to manufacture and sell CellerateRX Surgical and HYCOL products. In connection with the Applied Asset Purchase, Applied assigned its license agreement with CGI Cellerate RX to SMAT. Since the Closing, Sanara indirectly makes intercompany royalty payments to SMAT at the same rate as set forth in the Sublicense Agreement. Effective August 1, 2023, these intercompany royalty payments and the offsetting cost of goods sold are eliminated on a consolidated basis. BIAKŌS Antimicrobial Wound Gel and BIAKŌS Antimicrobial Skin and Wound Cleanser In July 2019, the Company executed a license agreement with Rochal Industries, LLC (“Rochal”), a related party, pursuant to which the Company acquired an exclusive world-wide license to market, sell and further develop antimicrobial products for the prevention and treatment of microbes on the human body utilizing certain Rochal patents and pending patent applications (the “BIAKŌS License Agreement”). Currently, the products covered by the BIAKŌS License Agreement are BIAKŌS Antimicrobial Wound Gel and BIAKŌS Antimicrobial Skin and Wound Cleanser. Both products are 510(k) cleared. Future commitments under the terms of the BIAKŌS License Agreement include: ● The Company pays Rochal a royalty of 2 4 130,000 10,000 150,000 ● The Company pays additional royalty annually based on specific net profit targets from sales of the licensed products, subject to a maximum of $ 1,000,000 Unless previously terminated by the parties, the BIAKŌS License Agreement expires with the related patents in December 2031. Under this agreement, royalty expense, which is recorded in “Cost of goods sold” in the accompanying Consolidated Statements of Operations, was $ 35,000 32,500 CuraShield Antimicrobial Barrier Film and No Sting Skin Protectant In October 2019, the Company executed a license agreement with Rochal pursuant to which the Company acquired an exclusive world-wide license to market, sell and further develop certain antimicrobial barrier film and skin protectant products for use in the human health care market utilizing certain Rochal patents and pending patent applications (the “ABF License Agreement”). Currently, the products covered by the ABF License Agreement are CuraShield Antimicrobial Barrier Film and a no sting skin protectant product. Future commitments under the terms of the ABF License Agreement include: ● The Company will pay Rochal a royalty of 2 4 50,000 10 75,000 ● The Company will pay additional royalties annually based on specific net profit targets from sales of the licensed products, subject to a maximum of $ 500,000 Unless previously terminated or extended by the parties, the ABF License Agreement will terminate upon expiration of the last U.S. patent in October 2033. No commercial sales or royalties have been recognized under this agreement as of March 31, 2024. Debrider License Agreement In May 2020, the Company executed a product license agreement with Rochal, pursuant to which the Company acquired an exclusive world-wide license to market, sell and further develop a debrider for human medical use to enhance skin condition or treat or relieve skin disorders, excluding uses primarily for beauty, cosmetic, or toiletry purposes (the “Debrider License Agreement”). Future commitments under the terms of the Debrider License Agreement include: ● Upon FDA clearance of the licensed products, the Company will pay Rochal $ 500,000 1,000,000 ● The Company will pay Rochal a royalty of 2 4 100,000 10 150,000 ● The Company will pay additional royalty annually based on specific net profit targets from sales of the licensed products, subject to a maximum of $ 1,000,000 Unless previously terminated or extended by the parties, the Debrider License Agreement will expire in October 2034. No commercial sales or royalties have been recognized under this agreement as of March 31, 2024. Rochal Asset Acquisition The Company entered into an asset purchase agreement with Rochal effective July 1, 2021, pursuant to which the Company purchased certain assets of Rochal. Pursuant to the asset purchase agreement, for the three-year period after the effective date, Rochal is entitled to receive consideration for any new product relating to the business that is directly and primarily based on an invention conceived and reduced to practice by a member or members of Rochal’s science team. For the three-year period after the effective date, Rochal is also entitled to receive an amount in cash equal to twenty-five percent of the proceeds received for any Grant (as defined in the asset purchase agreement) by either the Company or Rochal. In addition, the Company agreed to use commercially reasonable efforts to perform Minimum Development Efforts (as defined in the asset purchase agreement) with respect to certain products under development, which if obtained, will entitle the Company to intellectual property rights from Rochal in respect of such products. Precision Healing Merger Agreement In April 2022, the Company closed a merger transaction with Precision Healing pursuant to which Precision Healing became a wholly owned subsidiary of the Company. Pursuant to the terms of the merger agreement, holders of Precision Healing common stock and preferred stock, other than the Company, were entitled to receive closing consideration, consisting of $ 125,966 165,738 0.6 165,738 30.75 Upon the closing of the merger, the Precision Healing outstanding options previously granted under the Precision Healing Plan converted, pursuant to their terms, into options to acquire an aggregate of 144,191 10.71 4,424 7.32 April 22, 2031 12,301 12.05 August 10, 2030 Pursuant to the merger agreement, upon the achievement of certain performance thresholds, the securityholders of Precision Healing, including the holders of options and warrants to purchase Precision Healing common stock and certain persons promised options to purchase Precision Healing common stock, are also entitled to receive payments of up to $ 10.0 27.13 Scendia Purchase Agreement In July 2022, the Company closed the Scendia acquisition pursuant to which Scendia became a wholly owned subsidiary of the Company. Pursuant to the purchase agreement, the aggregate consideration for the acquisition at closing was approximately $ 7.6 1.6 291,686 94,798 In addition to the cash consideration and the stock consideration, the purchase agreement provides that Phillips is entitled to receive two potential earnout payments, payable on an annual basis, not to exceed $ 10.0 486,145 693,000 Applied Asset Purchase On August 1, 2023, the Company closed the Applied Asset Purchase. The Applied Purchased Assets were purchased for an initial aggregate purchase price of $ 15.25 In addition to the Cash Closing Consideration, Stock Closing Consideration and Installment Payments, the Applied Purchase Agreement provides that the Sellers are entitled to receive the Applied Earnout, which is payable to the Sellers in cash, upon the achievement of certain performance thresholds relating to SMAT’s collections from net sales of a collagen-based product currently under development. Upon expiration of the seventh anniversary of the Closing, to the extent the Sellers have not earned the entirety of the Applied Earnout, SMAT shall pay the Sellers the True-Up Payment. The Applied Earnout, minus the True-Up Payment and any Applied Earnout payments already made by SMAT, may be earned at any point in the future, including after the True-Up Payment is made. In connection with the Applied Asset Purchase and pursuant to the Applied Purchase Agreement, effective August 1, 2023, the Company entered into the Petito Services Agreement with the Owner, pursuant to which the Owner, as an independent contractor, agreed to provide the Petito Services. As consideration for the Petito Services, the Owner is entitled to receive: (i) a base salary of $12,000 per month during the term of the Petito Services Agreement, (ii) a royalty payment equal to three percent (3%) of the actual collections from net sales of certain products the Owner develops or codevelops that reach commercialization, (iii) a royalty payment equal to five percent (5%) for the first $50.0 million in aggregate collections from net sales of certain future products and a royalty payment of two and one-half percent (2.5%) on aggregate collections from net sales of certain future products on any amounts exceeding $50.0 million but up to $100.0 million, (iv) $500,000 in cash in the event that 510(k) clearance is issued for any future product accepted by the Company and (v) $1.0 million in cash in the event that a U.S. patent is issued for a certain product; provided that with respect to the incentive payments described in (iv) and (v) of the foregoing, the Owner shall not earn more than $2.5 million. The Petito Services Agreement has an initial term of three years and is subject to automatic successive one-month renewals unless earlier terminated in accordance with its terms. The Petito Services Agreement may be terminated upon the Owner’s death or disability or by the Company or the Owner “For Cause” (as defined in the Petito Services Agreement); provided, however, that the base salary described in (i) of the foregoing paragraph shall survive termination through the three-year initial term and the royalty payments and incentive payments described in (ii)-(v) of the foregoing paragraph shall survive termination of the Petito Services Agreement. Other Commitments On December 20, 2023, the Company signed an exclusive license agreement with Tufts University (“Tufts”) to develop and commercialize patented technology covering 18 unique collagen peptides. As part of this agreement, the Company formed a new subsidiary, Sanara Collagen Peptides, LLC (“SCP”) and 10 1.5 3 50,000 100,000 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 9 – SHAREHOLDERS’ EQUITY Common Stock At the Company’s Annual Meeting of Shareholders held in July 2020, the Company approved the Restated 2014 Omnibus Long Term Incentive Plan (the “LTIP Plan”) in which the Company’s directors, officers, employees and consultants are eligible to participate. A total of 681,159 1,318,841 In April 2022, the Company closed a merger transaction with Precision Healing pursuant to which Precision Healing became a wholly owned subsidiary of the Company. Pursuant to the terms of the merger agreement, holders of Precision Healing common stock and preferred stock, other than the Company, were entitled to receive closing consideration, consisting of $ 125,966 165,738 0.6 165,738 30.75 Upon the closing of the merger, the Precision Healing outstanding options previously granted under the Precision Healing Plan converted, pursuant to their terms, into options to acquire an aggregate of 144,191 10.71 4,424 7.32 12,301 12.05 Pursuant to the merger agreement, upon the achievement of certain performance thresholds, the securityholders of Precision Healing, including the holders of options and warrants to purchase Precision Healing common stock and certain persons promised options to purchase Precision Healing common stock, are also entitled to receive payments of up to $ 10.0 27.13 In July 2022, the Company closed the Scendia acquisition pursuant to which Scendia became a wholly owned subsidiary of the Company. Pursuant to the purchase agreement, the aggregate consideration at closing for the acquisition was approximately $ 7.6 1.6 291,686 94,798 In addition to the cash consideration and the stock consideration, the purchase agreement provides that Phillips is entitled to receive two potential earnout payments, payable on an annual basis, not to exceed $ 10.0 486,145 693,000 In February 2023, the Company entered into a Controlled Equity Offering SM 75,000,000 Sales of the shares were made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. Upon delivery of a placement notice and subject to the terms and conditions of the Sales Agreement, Cantor agreed to use commercially reasonable efforts consistent with its normal trading and sales practices, applicable state and federal law, rules and regulations and the rules of The Nasdaq Capital Market to sell the shares from time to time based upon the Company’s instructions, including any price, time period or size limits specified by the Company. The Company had no obligation to sell any of the shares under the Sales Agreement and could suspend or terminate the offering of its common stock pursuant to the Sales Agreement upon notice to Cantor and subject to other conditions. Cantor’s obligations to sell the shares under the Sales Agreement were subject to satisfaction of certain conditions, including customary closing conditions. Pursuant to the Sales Agreement, the Company paid Cantor a commission of 3.0 In 2023, the Company sold an aggregate of 26,143 1.1 0.9 On August 1, 2023, the Company closed the Applied Asset Purchase. Included in the purchase price was 73,809 Restricted Stock Awards During the three months ended March 31, 2024, the Company issued restricted stock awards under the LTIP Plan which are subject to certain vesting provisions and other terms and conditions set forth in each recipient’s respective restricted stock agreement. The Company granted and issued 100,662 7,830,959 Share-based compensation expense of $ 803,386 597,305 At March 31, 2024, there was $ 5,859,819 0.9 Below is a summary of restricted stock activity for the three months ended March 31, 2024: SCHEDULE OF RESTRICTED STOCK ACTIVITY For the Three Months Ended March 31, 2024 Weighted Average Shares Grant Date Fair Value Nonvested at beginning of period 144,211 $ 34.07 Granted 105,934 37.36 Vested (51,656 ) 32.03 Forfeited (5,272 ) 32.66 Nonvested at March 31, 2024 193,217 $ 36.46 Stock Options A summary of the status of outstanding stock options at March 31, 2024 and changes during the three months ended is presented below: SCHEDULE OF STOCK OPTION ACTIVITY For the Three Months Ended March 31, 2024 Weighted Average Exercise Weighted Average Remaining Aggregate Intrinsic Options Price Contract Life Value Outstanding at beginning of period 93,892 $ 10.22 Granted or assumed - - Exercised (3,059 ) 12.02 Forfeited - - Expired - - Outstanding at March 31, 2024 90,833 $ 10.16 6.6 $ 2,438,222.4 Exercisable at March 31, 2024 90,833 $ 10.16 6.6 $ 2,438,222.4 Warrants A summary of the status of outstanding warrants to purchase common stock at March 31, 2024 and changes during the three months then ended is presented below: SCHEDULE OF WARRANTS TO PURCHASE COMMON STOCK For the Three Months Ended March 31, 2024 Weighted Average Weighted Average Warrants Exercise Price Remaining Contract Life Outstanding at beginning of period 16,725 $ 10.80 Granted or assumed - - Exercised - - Forfeited - - Expired - - Outstanding at March 31, 2024 16,725 $ 10.80 6.5 Exercisable at March 31, 2024 16,725 $ 10.80 6.5 |
RELATED PARTIES
RELATED PARTIES | 3 Months Ended |
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTIES | NOTE 10 – RELATED PARTIES CellerateRX Sublicense Agreement The Company has an exclusive, world-wide sublicense to distribute CellerateRX Surgical and HYCOL products into the surgical and wound care markets from an affiliate of The Catalyst Group, Inc. (“Catalyst”), CGI Cellerate RX, which licenses the rights to CellerateRX Surgical and HYCOL from Applied. Sales of CellerateRX have comprised the substantial majority of the Company’s sales during the three months ended March 31, 2024 and 2023. In January 2021, the Company amended the term of the Sublicense Agreement to extend the term to May 17, 2050, with automatic successive one-year renewals so long as annual net sales of the licensed products exceed $ 1,000,000 The Company pays royalties based on the annual Net Sales of licensed products (as defined in the Sublicense Agreement) consisting of 3% of all collected Net Sales each year up to $12,000,000, 4% of all collected Net Sales each year that exceed $12,000,000 up to $20,000,000, and 5% of all collected Net Sales each year that exceed $20,000,000 As discussed further in Note 3, on August 1, 2023, the Company purchased certain assets from Applied, including the underlying intellectual property of, as well as the rights to manufacture and sell, CellerateRX Surgical and HYCOL products. In connection with the Applied Asset Purchase, Applied assigned its license agreement with CGI Cellerate RX to SMAT. Since the Closing, Sanara indirectly makes intercompany royalty payments to SMAT at the same rate as set forth in the Sublicense Agreement. Ronald T. Nixon, the Company’s Chief Executive Officer and Executive Chairman, is the founder and managing partner of Catalyst. Product License Agreements In July 2019, the Company executed a license agreement with Rochal, a related party, whereby the Company acquired an exclusive world-wide license to market, sell and further develop antimicrobial products for the prevention and treatment of microbes on the human body utilizing certain Rochal patents and pending patent applications. Currently, the products covered by the BIAKŌS License Agreement are BIAKŌS Antimicrobial Wound Gel and BIAKŌS Antimicrobial Skin and Wound Cleanser. Both products are 510(k) cleared. Mr. Nixon is a director of Rochal, and indirectly a significant shareholder of Rochal, and through the potential exercise of warrants, a majority shareholder of Rochal. Another one of the Company’s directors is also a director and significant shareholder of Rochal. In October 2019, the Company executed the ABF License Agreement with Rochal whereby the Company acquired an exclusive world-wide license to market, sell and further develop certain antimicrobial barrier film and skin protectant products for use in the human health care market utilizing certain Rochal patents and pending patent applications. Currently, the products covered by the ABF License Agreement are CuraShield Antimicrobial Barrier Film and a no sting skin protectant product. In May 2020, the Company executed a product license agreement with Rochal, whereby the Company acquired an exclusive world-wide license to market, sell and further develop a debrider for human medical use to enhance skin condition or treat or relieve skin disorders, excluding uses primarily for beauty, cosmetic, or toiletry purposes. See Note 8 for more information on these product license agreements. Consulting Agreement Concurrent with the Rochal asset purchase, in July 2021, the Company entered into a consulting agreement with Ann Beal Salamone pursuant to which Ms. Salamone agreed to provide the Company with consulting services with respect to, among other things, writing new patents, conducting patent intelligence, and participating in certain grant and contract reporting. In consideration for the consulting services to be provided to the Company, Ms. Salamone is entitled to receive an annual consulting fee of $ 177,697 Catalyst Transaction Advisory Services Agreement In March 2023, the Company entered into a Transaction Advisory Services Agreement (the “Catalyst Services Agreement”) effective March 1, 2023 with Catalyst, a related party. Pursuant to the Catalyst Services Agreement, Catalyst, by and through its directors, officers, employees and affiliates that are not simultaneously serving as directors, officers or employees of the Company (collectively, the “Covered Persons”), agreed to perform certain transaction advisory, business and organizational strategy, finance, marketing, operational and strategic planning, relationship access and corporate development services for the Company in connection with any merger, acquisition, recapitalization, divestiture, financing, refinancing, or other similar transaction in which the Company may be, or may consider becoming, involved, and any such additional services as mutually agreed upon in writing by and between Catalyst and the Company (the “Catalyst Services”). Pursuant to the Catalyst Services Agreement, the Company agreed to reimburse Catalyst for (i) compensation actually paid by Catalyst to any of the Covered Persons at a rate no more than a rate consistent with industry practice for the performance of services similar to the Catalyst Services, as documented in reasonably sufficient detail, and (ii) all reasonable out-of-pocket costs and expenses payable to unaffiliated third parties, as documented in customary expense reports, as each of (i) and (ii) is incurred in connection with the Catalyst Services rendered under the Catalyst Services Agreement, with all reimbursements being contingent upon the prior approval of the Audit Committee of the Company’s Board of Directors. The Company incurred costs of $ 56,272 zero |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS CRG Loan Agreement On April 17, 2024 (the “Closing Date”), the Company entered into the CRG Loan Agreement, by and among the Company, as borrower, the Guarantors, the Agent, and the lenders party thereto from time to time, providing for a senior secured term loan of up to $ 55.0 15.0 40.0 provided each such borrowing must be at least $5.0 million or a multiple of $5.0 million and occur between the Closing Date and June 30, 2025 The CRG Loan is due and payable on March 30, 2029 (the “Maturity Date”), absent any acceleration. Pursuant to the CRG Loan Agreement, the proceeds of the CRG Loan shall be used to repay the Cadence Term Loan, to pay fees and expenses related to the CRG Loan Agreement, for certain permitted acquisitions and similar investments and for general working capital and corporate purposes. The CRG Loan bears interest at a per annum rate equal to 13.25 4.0 8.00 5.25 th 1.50 7.00 Subject to certain exceptions, the Company is required to make mandatory prepayments of the CRG Loan with the proceeds of certain assets sales and in the event of a change of control of the Company. In addition, the Company may make a voluntary prepayment of the CRG Loan, in whole or in part, at any time. All mandatory and voluntary prepayments of the CRG Loan are subject to the payment of prepayment premiums as follows: (i) if prepayment occurs on or prior to the date that is one year following the applicable borrowing (the “Borrowing Date”), an amount equal to 10.0% of the aggregate outstanding principal amount of the Loan being prepaid and (ii) if prepayment occurs one year after the applicable Borrowing Date and on or prior to two years following the applicable Borrowing Date, an amount equal to 5.0% of the aggregate outstanding principal amount of the CRG Loan being prepaid Certain of the Company’s current and future subsidiaries, including the Guarantors, are guaranteeing the obligations of the Company under the CRG Loan Agreement. As security for their obligations under the CRG Loan Agreement, on the Closing Date, the Company and the Guarantors entered into a security agreement with the Agent pursuant to which the Company and the Guarantors granted to the Agent, as collateral agent for the lenders, a lien on substantially all of the Company’s and the Guarantors’ assets, including intellectual property (subject to certain exceptions). The CRG Loan Agreement contains affirmative and negative covenants customary for financings of this type, including limitations on the Company’s and the Guarantors’ abilities, among other things, to incur additional debt, grant or permit additional liens, make investments and acquisitions above certain thresholds, merge or consolidate with others, dispose of assets, pay dividends and distributions and enter into affiliate transactions, in each case, subject to certain exceptions. In addition, the CRG Loan Agreement contains the following financial covenants requiring the Company and the Guarantors in the aggregate to maintain: ● liquidity in an amount which shall exceed the greater of (i) $ 3.0 ● annual minimum revenue: (i) for the twelve-month period beginning on January 1, 2024 and ending on December 31, 2024, of at least $ 60.0 75.0 85.0 95.0 105.0 The CRG Loan Agreement contains representations and warranties of the Company and the Guarantors customary for financings of this type, and also includes events of default customary for financings of this type, including, among other things, non-payment, inaccuracy of representations and warranties, covenant breaches, a material adverse change, bankruptcy and insolvency, material judgments and a change of control, in certain cases subject to customary periods to cure. The occurrence and continuance of an event of default could result in the acceleration of the obligations under the CRG Loan Agreement. As discussed above in Note 7, on the Closing Date, the Cadence Loan Agreement terminated and all outstanding amounts under the Cadence Term Loan were repaid in full, and all security interests and other liens granted to or held by the Bank were terminated and released. Resignation of Chief Executive Officer On May 10, 2024 (the “Effective Date”), Zachary B. Fleming delivered notice to the Board of Directors of the Company (the “Board”) that he is resigning from his position as Chief Executive Officer of the Company, effective immediately. Effective as of the Effective Date, Mr. Fleming’s amended and restated employment agreement (the “Fleming Employment Agreement”) terminated, except that certain surviving customary confidentiality provisions and non-disparagement covenants will remain in full force and effect. The Company intends to negotiate a separation agreement (the “Separation Agreement”) with Mr. Fleming to set forth certain separation benefits for Mr. Fleming and provide for certain restrictive covenants in favor of the Company. In connection with Mr. Fleming’s resignation, the Board modified the vesting provisions of Mr. Fleming’s restricted stock award agreements such that fifty percent ( 50 provided Appointment of New Chief Executive Officer On May 12, 2024, the Board appointed Ronald T. Nixon, the Company’s Executive Chairman, as the Chief Executive Officer of the Company, effective immediately, to serve in such position until his successor is elected and qualified. There are no arrangements or understandings between Mr. Nixon and any other persons pursuant to which he was selected to serve as the Company’s Chief Executive Officer. There is no family relationship between Mr. Nixon and any director or executive officer of the Company. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Sanara MedTech Inc. and its wholly owned and majority-owned subsidiaries, as well as other entities in which the Company has a controlling financial interest. All significant intercompany profits, losses, transactions and balances have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management of the Company, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period. These financial statements and notes should be read in conjunction with the financial statements for each of the two years ended December 31, 2023 and 2022, which are included in the Company’s most recent Annual Report on Form 10-K. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported revenue and expenses during the reporting period. However, actual results could differ from those estimates and there may be changes to the Company’s estimates in future periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. |
Income/Loss Per Share | Income/Loss Per Share The Company computes income/loss per share in accordance with Accounting Standards Codification (“ASC”) Topic 260, Earnings per Share, which requires the Company to present basic and diluted income per share when the effect is dilutive. Basic income per share is computed by dividing income available to common shareholders by the weighted average number of shares of common stock outstanding. Diluted income per share is computed similarly to basic income per share, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive. All common stock equivalents were excluded from the calculations for the periods presented as their inclusion would have been anti-dilutive during the three months ended March 31, 2024 and 2023 due to the Company’s net loss. The following table summarizes the shares of common stock that were potentially issuable but were excluded from the computation of diluted net loss per share for the three months ended March 31, 2024 and 2023 as such shares would have had an anti-dilutive effect: SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER SHARE As of March 31, 2024 2023 Stock options (a) 90,833 146,191 Warrants (b) 16,725 16,725 Unvested restricted stock 193,217 181,887 Anti-dilutive securities 193,217 181,887 (a) Shares underlying stock options assumed pursuant to the merger agreement with Precision Healing, Inc. (“Precision Healing”) in April 2022. (b) Shares underlying warrants assumed pursuant to the merger agreement with Precision Healing in April 2022. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when a purchase order is received from the customer and control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for transferring those goods or services. Revenue is recognized based on the following five-step model: - Identification of the contract with a customer - Identification of the performance obligations in the contract - Determination of the transaction price - Allocation of the transaction price to the performance obligations in the contract - Recognition of revenue when, or as, the Company satisfies a performance obligation Details of this five-step process are as follows: Identification of the contract with a customer Customer purchase orders are generally considered to be contracts under ASC 606. Purchase orders typically identify the specific terms of products to be delivered, create the enforceable rights and obligations of both parties and result in commercial substance. No other forms of contract revenue recognition, such as the completed contract or percentage of completion methods, were utilized by the Company in either 2024 or 2023. Performance obligations The Company’s performance obligation is generally limited to delivery of the requested items to its customers at the agreed upon quantities and prices. Determination and allocation of the transaction price The Company has established prices for its products. These prices are effectively agreed to when customers place purchase orders with the Company. Rebates and discounts, if any, are recognized in full at the time of sale as a reduction of net revenue. Allocation of transaction prices is not necessary where only one performance obligation exists. Recognition of revenue as performance obligations are satisfied Product revenues are recognized when a purchase order is received from the customer, the products are delivered and control of the goods and services passes to the customer. Disaggregation of Revenue Revenue streams from product sales and royalties are summarized below for the three months ended March 31, 2024 and 2023. SCHEDULE OF REVENUE FROM PRODUCT SALES AND ROYALTIES Three Months Ended March 31, 2024 2023 Soft tissue repair products $ 16,082,292 $ 12,872,481 Bone fusion products 2,454,346 2,599,186 Royalty revenue - 50,250 Total Net Revenue $ 18,536,638 $ 15,521,917 |
Accounts Receivable Allowances | Accounts Receivable Allowances Accounts receivable are typically due within 30 days of invoicing. The Company establishes an allowance for doubtful accounts to provide for an estimate of accounts receivable which are not expected to be collectible. The Company bases the allowance on an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and other information as applicable and will record its allowance based on the estimated credit losses. The Company recorded bad debt expense of $ 65,000 36,000 593,030 528,030 3,670 3,820 |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value, with cost computed on a first-in, first-out basis. Inventories consist primarily of finished goods, and also include an immaterial amount of raw materials and related packaging components. The Company recorded inventory obsolescence expense of $ 95,235 30,511 398,478 446,917 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the related assets, ranging from two to ten years. Below is a summary of property and equipment for the periods presented: SCHEDULE OF PROPERTY AND EQUIPMENT Useful March 31, December 31, Life 2024 2023 Computers 3 5 $ 215,500 $ 194,788 Office equipment 3 7 214,190 201,785 Furniture and fixtures 5 10 304,338 304,338 Leasehold improvements 2 5 166,871 134,170 Internal use software 5 1,618,999 1,618,999 Property and equipment, gross 2,519,898 2,454,080 Less accumulated depreciation (1,329,093 ) (1,196,124 ) Property and equipment, net $ 1,190,805 $ 1,257,956 Depreciation expense related to property and equipment was $ 132,969 107,674 |
Internal Use Software | Internal Use Software The Company accounts for costs incurred to develop or acquire computer software for internal use in accordance with ASC Topic 350-40, Intangibles – Goodwill and Other. The Company capitalizes the costs incurred during the application development stage, which generally includes third-party developer fees to design the software configuration and interfaces, coding, installation and testing. The Company begins capitalization of qualifying costs when both the preliminary project stage is completed and management has authorized further funding for the completion of the project. Costs incurred during the preliminary project stage along with post implementation stages of internal-use computer software are expensed as incurred. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality. Capitalized development costs are classified as “Property and equipment, net” in the Consolidated Balance Sheets and are depreciated over the estimated useful life of the software, which is generally five years. |
Goodwill | Goodwill The excess of purchase price over the fair value of identifiable net assets acquired in business combinations is recorded as goodwill. As of March 31, 2024 and December 31, 2023, all of the Company’s goodwill relates to the acquisition of Scendia Biologics, LLC (“Scendia”). Goodwill has an indefinite useful life and is not amortized. Goodwill is tested annually as of December 31 for impairment, or more frequently if circumstances indicate impairment may have occurred. The Company may first perform a qualitative assessment to determine if it is more likely than not that the fair value of the reporting unit is less than the respective carrying value. If it is determined that it is more likely than not that a reporting unit’s fair value is less than its carrying value, then the Company will determine the fair value of the reporting unit and record an impairment charge for the difference between fair value and carrying value (not to exceed the carrying amount of goodwill). No impairment was recorded during the three months ended March 31, 2024. |
Intangible Assets | Intangible Assets Intangible assets are stated at cost of acquisition less accumulated amortization and impairment loss, if any. Cost of acquisition includes the purchase price and any cost directly attributable to bringing the asset to its working condition for the intended use. The Company amortizes its finite-lived intangible assets on a straight-line basis over the estimated useful life of the respective assets which is generally the life of the related patents or licenses, seven years for customer relationships and five years for assembled workforces. See Note 4 for more information on intangible assets. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including certain identifiable intangibles held and to be used by the Company, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The Company continuously evaluates the recoverability of its long-lived assets based on estimated future cash flows and the estimated liquidation value of such long-lived assets and provides for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived assets. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, undiscounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated fair value less cost to sell. No impairment was recorded during the three months ended March 31, 2024 and 2023. |
Investments in Equity Securities | Investments in Equity Securities The Company’s equity investments consist of nonmarketable equity securities in privately held companies without readily determinable fair values. Unless accounted for under the equity method of accounting, the investments are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. The Company did not have any investments which are recorded applying the equity method of accounting as of March 31, 2024. The Company has reviewed the carrying value of its investments and has determined there was no impairment or observable price changes as of and for the three months ended March 31, 2024 and 2023. |
Fair Value Measurement | Fair Value Measurement As defined in ASC Topic 820, Fair Value Measurement (“ASC 820”), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). This fair value measurement framework applies at both the initial and subsequent measurement. The three levels of the fair value hierarchy defined by ASC 820 are as follows: Level 1 – Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of financial instruments such as exchange-traded derivatives, marketable securities and listed equities. Level 2 – Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reported date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Instruments in this category generally include nonexchange-traded derivatives such as commodity swaps, interest rate swaps, options and collars. Level 3 – Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The carrying amounts of cash, accounts receivable, accounts payable and accrued expenses, other than acquisition-related expenses, approximate fair value because of the short-term nature of these instruments. The fair value of acquisition-related accrued expenses is categorized as Level 2 of the fair value hierarchy. The value of these instruments has been estimated using discounted cash flow analysis based on the Company’s incremental borrowing rate. The carrying value of the Company’s debt, which has variable interest rates determined each month, approximates fair value based on instruments with similar terms (Level 2 inputs). The fair value of the contingent earnout consideration and the acquisition date fair value of goodwill and intangibles related to the acquisitions discussed in Notes 3 and 4 are based on Level 3 inputs. Liabilities for contingent consideration for the Precision Healing merger, acquisition of Scendia and Applied Asset Purchase (defined below) (see Note 3 for more information) are measured at fair value each reporting period, with the acquisition-date fair value included as part of the consideration transferred. Subsequent changes in fair value for the Precision Healing and Scendia acquisitions are reported under the line item captioned “Change in fair value of earnout liabilities” in the Company’s Consolidated Statements of Operations. Due to the Applied Asset Purchase being accounted for as an asset acquisition and given that the transaction did not include contingent shares, subsequent revaluations of contingent consideration for the Applied acquisition results in an adjustment to the contingent consideration liability and the intellectual property intangible asset with a cumulative catch-up amortization adjustment. The current year changes in fair value of earnout liabilities below are as a result of a net decrease in the estimated fair value of the earnout liabilities established at the time of the Company’s Precision Healing and Scendia acquisitions. The following table sets forth a summary of the changes in fair value for the Level 3 contingent earnout considerations. SCHEDULE OF CHANGES IN FAIR VALUE FOR CONTINGENT EARNOUT CONSIDERATION Balance at December 31, 2023 $ 3,823,001 Changes in fair value of earnout liabilities (65,678 ) Balance at March 31, 2024 $ 3,757,323 |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method, whereby deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities reflect the tax rates expected to be in effect for the years in which the differences are expected to reverse. A valuation allowance is provided if it is more likely than not that some or all the deferred tax asset will not be realized. |
Stock-based Compensation | Stock-based Compensation The Company accounts for stock-based compensation to employees and nonemployees in accordance with ASC Topic 718, Compensation – Stock Compensation. Stock-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as expense over the stipulated vesting period, if any. The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and warrants, and the closing price of the Company’s common stock for grants of common stock, including restricted stock awards. |
Research and Development Costs | Research and Development Costs Research and development (“R&D”) expenses consist of personnel-related expenses, including salaries, stock-based compensation and benefits for all personnel directly engaged in R&D activities, contracted services, materials, prototype expenses and allocated overhead which is comprised of lease expense and other facilities-related costs. R&D expenses include costs related to enhancements to the Company’s currently available products and additional investments in the product and platform development pipeline. The Company expenses R&D costs as incurred. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326). This update amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The Company adopted the new guidance effective January 1, 2023. The adoption did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires disclosure of incremental segment information on an annual and interim basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company is currently evaluating the effect of this pronouncement on its disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which expands the disclosure required for income taxes. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER SHARE | The following table summarizes the shares of common stock that were potentially issuable but were excluded from the computation of diluted net loss per share for the three months ended March 31, 2024 and 2023 as such shares would have had an anti-dilutive effect: SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER SHARE As of March 31, 2024 2023 Stock options (a) 90,833 146,191 Warrants (b) 16,725 16,725 Unvested restricted stock 193,217 181,887 Anti-dilutive securities 193,217 181,887 (a) Shares underlying stock options assumed pursuant to the merger agreement with Precision Healing, Inc. (“Precision Healing”) in April 2022. (b) Shares underlying warrants assumed pursuant to the merger agreement with Precision Healing in April 2022. |
SCHEDULE OF REVENUE FROM PRODUCT SALES AND ROYALTIES | Revenue streams from product sales and royalties are summarized below for the three months ended March 31, 2024 and 2023. SCHEDULE OF REVENUE FROM PRODUCT SALES AND ROYALTIES Three Months Ended March 31, 2024 2023 Soft tissue repair products $ 16,082,292 $ 12,872,481 Bone fusion products 2,454,346 2,599,186 Royalty revenue - 50,250 Total Net Revenue $ 18,536,638 $ 15,521,917 |
SCHEDULE OF PROPERTY AND EQUIPMENT | SCHEDULE OF PROPERTY AND EQUIPMENT Useful March 31, December 31, Life 2024 2023 Computers 3 5 $ 215,500 $ 194,788 Office equipment 3 7 214,190 201,785 Furniture and fixtures 5 10 304,338 304,338 Leasehold improvements 2 5 166,871 134,170 Internal use software 5 1,618,999 1,618,999 Property and equipment, gross 2,519,898 2,454,080 Less accumulated depreciation (1,329,093 ) (1,196,124 ) Property and equipment, net $ 1,190,805 $ 1,257,956 |
SCHEDULE OF CHANGES IN FAIR VALUE FOR CONTINGENT EARNOUT CONSIDERATION | SCHEDULE OF CHANGES IN FAIR VALUE FOR CONTINGENT EARNOUT CONSIDERATION Balance at December 31, 2023 $ 3,823,001 Changes in fair value of earnout liabilities (65,678 ) Balance at March 31, 2024 $ 3,757,323 |
APPLIED ASSET PURCHASE (Tables)
APPLIED ASSET PURCHASE (Tables) - Applied Asset Purchase [Member] | 3 Months Ended |
Mar. 31, 2024 | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF ASSET PURCHASE CONSIDERATIONS | The total purchase consideration for the Applied Asset Purchase as determined by the Company was as follows: SCHEDULE OF ASSET PURCHASE CONSIDERATIONS Consideration Equity Shares Dollar Value Cash Closing Consideration $ 9,750,000 Fair value of Stock Closing Consideration 73,809 3,089,645 Fair value of Installment Payments 2,040,808 Cash paid for inventory 30,007 Fair value of Petito Services Agreement defined payments 825,834 Fair value of Petito Services Agreement contingent consideration 893,000 Direct transaction costs 162,743 Total purchase consideration $ 16,792,037 |
SCHEDULE OF PURCHASE CONSIDERATION ON FAIR VALUE OF ASSETS ACQUIRED | SCHEDULE OF PURCHASE CONSIDERATION ON FAIR VALUE OF ASSETS ACQUIRED Description Amount Inventory $ 30,007 Equipment 33,062 Intellectual property 16,728,968 Net assets acquired $ 16,792,037 |
GOODWILL AND INTANGIBLES, NET (
GOODWILL AND INTANGIBLES, NET (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF CHANGES IN THE CARRYING AMOUNT OF THE GOODWILL | The changes in the carrying amount of the Company’s goodwill were as follows: SCHEDULE OF CHANGES IN THE CARRYING AMOUNT OF THE GOODWILL Total Balance as of December 31, 2022 $ 3,601,781 Acquisitions - Balance as of December 31, 2023 3,601,781 Acquisitions - Balance as of March 31, 2024 $ 3,601,781 |
SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS | The carrying values of the Company’s intangible assets were as follows for the periods presented: SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS March 31, 2024 December 31, 2023 Accumulated Accumulated Cost Amortization Net Cost Amortization Net Amortizable Intangible Assets: Product Licenses $ 4,793,879 $ (1,439,136 ) $ 3,354,743 $ 4,793,879 $ (1,342,626 ) $ 3,451,253 Patents and Other IP 38,570,549 (3,765,198 ) 34,805,351 38,570,549 (3,181,186 ) 35,389,363 Customer relationships and other 7,947,332 (2,153,816 ) 5,793,516 7,947,332 (1,861,887 ) 6,085,445 Total $ 51,311,760 $ (7,358,150 ) $ 43,953,610 $ 51,311,760 $ (6,385,699 ) $ 44,926,061 |
SCHEDULE OF FUTURE AMORTIZATION EXPENSE | SCHEDULE OF FUTURE AMORTIZATION EXPENSE Remainder of 2024 $ 2,917,353 2025 3,889,804 2026 3,872,548 2027 3,758,696 2028 3,725,454 2029 3,725,454 Thereafter 22,064,301 Total $ 43,953,610 |
INVESTMENTS IN EQUITY SECURIT_2
INVESTMENTS IN EQUITY SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Schedule of Investments [Abstract] | |
SCHEDULE OF INVESTMENTS | The following summarizes the Company’s investments for the periods presented: SCHEDULE OF INVESTMENTS March 31, 2024 December 31, 2023 Carrying Amount Economic Interest Carrying Amount Economic Interest Cost Method Investments Direct Dermatology, Inc. $ 1,000,000 $ 1,000,000 Pixalere Healthcare Inc. 2,084,278 2,084,278 Total Cost Method Investments $ 3,084,278 $ 3,084,278 |
OPERATING LEASES (Tables)
OPERATING LEASES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Operating Leases | |
SCHEDULE OF OPERATING LEASE LIABILITY | Maturity of Operating Lease Liabilities SCHEDULE OF OPERATING LEASE LIABILITY March 31, 2024 Remainder of 2024 $ 371,508 2025 532,053 2026 379,529 2027 297,947 2028 295,689 2029 300,158 Thereafter 604,049 Total lease payments 2,780,933 Less imputed interest (777,530 ) Present Value of Lease Liabilities $ 2,003,403 Operating lease liabilities – current $ 377,273 Operating lease liabilities – long-term $ 1,626,130 |
DEBT AND CREDIT FACILITIES (Tab
DEBT AND CREDIT FACILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt And Credit Facilities | |
SCHEDULE OF LONG-TERM DEBT | The table below presents the components of outstanding debt for the periods presented: As of March 31, 2024 and December 31, 2023, the interest rate on the advance under the Cadence Term Loan was 8.3 SCHEDULE OF LONG-TERM DEBT March 31, December 31, Cadence Term Loan $ 9,750,000 $ 9,750,000 Total debt 9,750,000 9,750,000 Less: debt issuance costs, net of accumulated amortization of $ 8,221 5,138 (53,438 ) (56,520 ) Long-term debt 9,696,562 9,693,480 Less: Current portion of long-term debt 928,571 580,357 Long-term debt $ 8,767,991 $ 9,113,123 |
SCHEDULE OF MATURITIES OUTSTANDING DEBT | The table below presents the aggregate maturities of the Company’s outstanding debt as of March 31, 2024: SCHEDULE OF MATURITIES OUTSTANDING DEBT Year Total Remainder of 2024 $ 580,357 2025 1,625,000 2026 1,950,000 2027 1,950,000 2028 3,644,643 Thereafter - Total debt $ 9,750,000 |
SHAREHOLDERS_ EQUITY (Tables)
SHAREHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
SCHEDULE OF RESTRICTED STOCK ACTIVITY | Below is a summary of restricted stock activity for the three months ended March 31, 2024: SCHEDULE OF RESTRICTED STOCK ACTIVITY For the Three Months Ended March 31, 2024 Weighted Average Shares Grant Date Fair Value Nonvested at beginning of period 144,211 $ 34.07 Granted 105,934 37.36 Vested (51,656 ) 32.03 Forfeited (5,272 ) 32.66 Nonvested at March 31, 2024 193,217 $ 36.46 |
SCHEDULE OF STOCK OPTION ACTIVITY | A summary of the status of outstanding stock options at March 31, 2024 and changes during the three months ended is presented below: SCHEDULE OF STOCK OPTION ACTIVITY For the Three Months Ended March 31, 2024 Weighted Average Exercise Weighted Average Remaining Aggregate Intrinsic Options Price Contract Life Value Outstanding at beginning of period 93,892 $ 10.22 Granted or assumed - - Exercised (3,059 ) 12.02 Forfeited - - Expired - - Outstanding at March 31, 2024 90,833 $ 10.16 6.6 $ 2,438,222.4 Exercisable at March 31, 2024 90,833 $ 10.16 6.6 $ 2,438,222.4 |
SCHEDULE OF WARRANTS TO PURCHASE COMMON STOCK | A summary of the status of outstanding warrants to purchase common stock at March 31, 2024 and changes during the three months then ended is presented below: SCHEDULE OF WARRANTS TO PURCHASE COMMON STOCK For the Three Months Ended March 31, 2024 Weighted Average Weighted Average Warrants Exercise Price Remaining Contract Life Outstanding at beginning of period 16,725 $ 10.80 Granted or assumed - - Exercised - - Forfeited - - Expired - - Outstanding at March 31, 2024 16,725 $ 10.80 6.5 Exercisable at March 31, 2024 16,725 $ 10.80 6.5 |
SCHEDULE OF COMPUTATION OF DILU
SCHEDULE OF COMPUTATION OF DILUTED NET LOSS PER SHARE (Details) - shares | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Equity Option [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities | [1] | 90,833 | 146,191 |
Warrant [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities | [2] | 16,725 | 16,725 |
Unvested Restricted Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities | 193,217 | 181,887 | |
[1]Shares underlying stock options assumed pursuant to the merger agreement with Precision Healing, Inc. (“Precision Healing”) in April 2022.[2]Shares underlying warrants assumed pursuant to the merger agreement with Precision Healing in April 2022. |
SCHEDULE OF REVENUE FROM PRODUC
SCHEDULE OF REVENUE FROM PRODUCT SALES AND ROYALTIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Product Information [Line Items] | ||
Total Net Revenue | $ 18,536,638 | $ 15,521,917 |
Soft Tissue Repair Products [Member] | ||
Product Information [Line Items] | ||
Total Net Revenue | 16,082,292 | 12,872,481 |
Bone Fusion Products [Member] | ||
Product Information [Line Items] | ||
Total Net Revenue | 2,454,346 | 2,599,186 |
Royalty [Member] | ||
Product Information [Line Items] | ||
Total Net Revenue | $ 50,250 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,519,898 | $ 2,454,080 |
Less accumulated depreciation | (1,329,093) | (1,196,124) |
Property and equipment, net | 1,190,805 | 1,257,956 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 215,500 | 194,788 |
Computer Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Computer Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 214,190 | 201,785 |
Office Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Office Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 7 years | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 304,338 | 304,338 |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 10 years | |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 166,871 | 134,170 |
Leasehold Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years | |
Leasehold Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 5 years | |
Internal Use Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,618,999 | $ 1,618,999 |
Useful life | 5 years |
SCHEDULE OF CHANGES IN FAIR VAL
SCHEDULE OF CHANGES IN FAIR VALUE FOR CONTINGENT EARNOUT CONSIDERATION (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Accounting Policies [Abstract] | |
Balance at December 31, 2023 | $ 3,823,001 |
Changes in fair value of earnout liabilities | (65,678) |
Balance at March 31, 2024 | $ 3,757,323 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Accounting Policies [Abstract] | |||
Bad debt expense | $ 65,000 | $ 36,000 | |
Allowance for doubtful accounts | 593,030 | $ 528,030 | |
Accounts receivable allowances | 3,670 | 3,820 | |
Inventory obsolescence expense | 95,235 | 30,511 | |
Allowance for obsolete and slow-moving inventory | 398,478 | $ 446,917 | |
Depreciation | $ 132,969 | $ 107,674 |
SCHEDULE OF ASSET PURCHASE CONS
SCHEDULE OF ASSET PURCHASE CONSIDERATIONS (Details) | Aug. 01, 2023 USD ($) shares |
Applied Asset Purchase | |
Cash Closing Consideration | $ 9,750,000 |
Fair value of Stock Closing Consideration | $ 3,089,645 |
Equity Shares | shares | 73,809 |
Fair value of Installment Payments | $ 2,040,808 |
Cash paid for inventory | 30,007 |
Fair value of Petito Services Agreement defined payments | 825,834 |
Fair value of Petito Services Agreement contingent consideration | 893,000 |
Direct transaction costs | 162,743 |
Total purchase consideration | $ 16,792,037 |
SCHEDULE OF PURCHASE CONSIDERAT
SCHEDULE OF PURCHASE CONSIDERATION ON FAIR VALUE OF ASSETS ACQUIRED (Details) - Applied Asset Purchase [Member] | Mar. 31, 2024 USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Inventory | $ 30,007 |
Equipment | 33,062 |
Intellectual property | 16,728,968 |
Net assets acquired | $ 16,792,037 |
APPLIED ASSET PURCHASE (Details
APPLIED ASSET PURCHASE (Details Narrative) $ in Thousands | Aug. 01, 2023 USD ($) shares |
Business Acquisition, Contingent Consideration [Line Items] | |
Cash consideration | $ 10,000 |
Applied Asset Purchase [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Purchase agreement description | As consideration for the Petito Services, the Owner is entitled to receive: (i) a base salary of $12,000 per month during the term of the Petito Services Agreement, (ii) a royalty payment equal to three percent (3%) of the actual collections from net sales of certain products the Owner develops or co-develops that reach commercialization, (iii) a royalty payment equal to five percent (5%) for the first $50.0 million in aggregate collections from net sales of certain future products and a royalty payment of two and one-half percent (2.5%) on aggregate collections from net sales of certain future products on any amounts exceeding $50.0 million but up to $100.0 million, (iv) $500,000 in cash in the event that 510(k) clearance is issued for any future product accepted by the Company and (v) $1.0 million in cash in the event that a U.S. patent is issued for a certain product; provided that with respect to the incentive payments described in (iv) and (v) of the foregoing, the Owner shall not earn more than $2.5 million. |
Cash Closing Consideration [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Payments to acquire productive assets | $ 15,250 |
Cash consideration | $ 9,750 |
Stock issued during period shares issued for services | shares | 73,809 |
Stock Closing Consideration [Member] | |
Business Acquisition, Contingent Consideration [Line Items] | |
Payments to acquire productive assets | $ 3,000 |
Cash consideration | $ 2,500 |
SCHEDULE OF CHANGES IN THE CARR
SCHEDULE OF CHANGES IN THE CARRYING AMOUNT OF THE GOODWILL (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance as of December 31, 2023 | $ 3,601,781 | $ 3,601,781 |
Acquisitions | ||
Balance as of March 31, 2024 | $ 3,601,781 | $ 3,601,781 |
SCHEDULE OF FINITE LIVED INTANG
SCHEDULE OF FINITE LIVED INTANGIBLE ASSETS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Net | $ 43,953,610 | $ 44,926,061 |
Licensing Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,793,879 | 4,793,879 |
Accumulated amortization | (1,439,136) | (1,342,626) |
Net | 3,354,743 | 3,451,253 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 38,570,549 | 38,570,549 |
Accumulated amortization | (3,765,198) | (3,181,186) |
Net | 34,805,351 | 35,389,363 |
Customer Relationships and Other [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 7,947,332 | 7,947,332 |
Accumulated amortization | (2,153,816) | (1,861,887) |
Net | 5,793,516 | 6,085,445 |
Amortizable Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 51,311,760 | 51,311,760 |
Accumulated amortization | (7,358,150) | (6,385,699) |
Net | $ 43,953,610 | $ 44,926,061 |
SCHEDULE OF FUTURE AMORTIZATION
SCHEDULE OF FUTURE AMORTIZATION EXPENSE (Details) | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Remainder of 2024 | $ 2,917,353 |
2025 | 3,889,804 |
2026 | 3,872,548 |
2027 | 3,758,696 |
2028 | 3,725,454 |
2029 | 3,725,454 |
Thereafter | 22,064,301 |
Total | $ 43,953,610 |
GOODWILL AND INTANGIBLES, NET_2
GOODWILL AND INTANGIBLES, NET (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Weighted average useful life | 14 years 6 months | |
Amortization of intangible assets | $ 972,451 | $ 671,201 |
SCHEDULE OF INVESTMENTS (Detail
SCHEDULE OF INVESTMENTS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Cost method investment | $ 3,084,278 | $ 3,084,278 |
Direct Dermatology Inc. [Member] | ||
Cost method investment | 1,000,000 | 1,000,000 |
Pixalere Healthcare Inc. [Member] | ||
Cost method investment | $ 2,084,278 | $ 2,084,278 |
INVESTMENTS IN EQUITY SECURIT_3
INVESTMENTS IN EQUITY SECURITIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2022 | Jun. 30, 2021 | Jul. 31, 2020 | Mar. 31, 2023 | Dec. 31, 2021 | Mar. 31, 2024 | Dec. 31, 2023 | |
Long term investments | $ 3,084,278 | $ 3,084,278 | |||||
Value of shares purchased | $ 1,033,761 | ||||||
Series B-2 Preferred Shares [Member] | Direct Derm's [Member] | |||||||
Ownership interest | 2.90% | 8.10% | |||||
Series B-2 Preferred Shares [Member] | |||||||
Long term investments | $ 500,000 | ||||||
Purchase of additional shares | 7,142,857 | ||||||
Series B-2 Preferred Shares [Member] | Direct Derm's [Member] | |||||||
Purchase of additional shares | 3,571,429 | 3,571,430 | |||||
Value of shares purchased | $ 250,000 | $ 250,000 | |||||
Class A Preferred Shares [Member] | Pixalere Healthcare Inc. [Member] | |||||||
Purchase of additional shares | 278,587 | ||||||
Investments | $ 2,084,278 | ||||||
Conversion of shares | 27.30% | ||||||
Class A Preferred Shares [Member] | Pixalere Healthcare Inc. [Member] | |||||||
Ownership interest | 27.30% | ||||||
Ownership amount | $ 93,879 |
SCHEDULE OF OPERATING LEASE LIA
SCHEDULE OF OPERATING LEASE LIABILITY (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Operating Leases | ||
Remainder of 2024 | $ 371,508 | |
2025 | 532,053 | |
2026 | 379,529 | |
2027 | 297,947 | |
2028 | 295,689 | |
2029 | 300,158 | |
Thereafter | 604,049 | |
Total lease payments | 2,780,933 | |
Less imputed interest | (777,530) | |
Present Value of Lease Liabilities | 2,003,403 | |
Operating lease liabilities – current | 377,273 | $ 361,185 |
Operating lease liabilities – long-term | $ 1,626,130 | $ 1,737,445 |
OPERATING LEASES (Details Narra
OPERATING LEASES (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Operating lease right of use asset | $ 1,894,687 | $ 1,995,204 | |
Operating lease liability | 2,003,403 | ||
Operating lease expenses | 138,798 | $ 88,419 | |
Operating lease payments | $ 133,509 | $ 87,691 | |
Weighted average remaining lease term | 5 years 9 months 18 days | ||
Weighted average discount rate | 7.65% | ||
Office Space One [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Remaining lease term | 81 months | ||
Office Space Two [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Remaining lease term | 17 months | ||
Office Space Three [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Remaining lease term | 34 months |
SCHEDULE OF LONG-TERM DEBT (Det
SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Short-Term Debt [Line Items] | ||
Total debt | $ 9,750,000 | $ 9,750,000 |
Less: debt issuance costs, net of accumulated amortization of $8,221 and $5,138 | (53,438) | (56,520) |
Long-term debt | 9,696,562 | 9,693,480 |
Less: Current portion of long-term debt | 928,571 | 580,357 |
Long-term debt | 8,767,991 | 9,113,123 |
Term Loan [Member] | ||
Short-Term Debt [Line Items] | ||
Total debt | $ 9,750,000 | $ 9,750,000 |
SCHEDULE OF LONG-TERM DEBT (D_2
SCHEDULE OF LONG-TERM DEBT (Details) (Parenthetical) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt And Credit Facilities | ||
Debt issuance costs | $ 8,221 | $ 5,138 |
SCHEDULE OF MATURITIES OUTSTAND
SCHEDULE OF MATURITIES OUTSTANDING DEBT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt And Credit Facilities | ||
Remainder of 2024 | $ 580,357 | |
2025 | 1,625,000 | |
2026 | 1,950,000 | |
2027 | 1,950,000 | |
2028 | 3,644,643 | |
Thereafter | ||
Total debt | $ 9,750,000 | $ 9,750,000 |
DEBT AND CREDIT FACILITIES (Det
DEBT AND CREDIT FACILITIES (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Aug. 05, 2024 | Apr. 17, 2024 | Aug. 01, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Unamortized debt issuance costs | $ 53,438 | $ 56,520 | ||||
Amortization expense related to debt issuance cost | $ 3,083 | |||||
CRG Term Loan Agreement [Member] | Subsequent Event [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Term loan percentage | 13.25% | |||||
Secured term loan | $ 55 | |||||
Term Loan [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Term loan percentage | 8.30% | 8.30% | ||||
Debt issuance costs | $ 61,658 | |||||
Loan Agreement [Member] | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||
Principal amount | $ 12,000,000 | |||||
Loan agreement percentage | 100% | |||||
Loan bank advance | $ 9,750,000 | |||||
Bank, interest rate | 3% | |||||
Loan agreement, description | (i) create, assume or guarantee certain liabilities, (ii) create, assume or suffer liens securing indebtedness, (iii) make or permit loans and advances, (iv) acquire any assets outside the ordinary course of business, (v) consolidate, merge or sell all or a material part of its assets, (vi) pay dividends or other distributions on, or redeem or repurchase, interest in an obligor, including the Company, as guarantor (vii) cease, suspend or materially curtail business operations or (viii) engage in certain affiliate transactions. In addition, the Cadence Loan Agreement contained financial covenants that required SMAT to maintain (i) a minimum Debt Services Coverage Ratio of 1.2 to 1.0 as of the last day of each applicable fiscal quarter and (ii) a maximum Cash Flow Leverage Ratio of not more than (a) 4.5 to 1.0 as of the last day of the fiscal quarter ending on September 30, 2023, (b) 4.0 to 1.0 as of the last day of each fiscal quarter ending on December 31, 2023 and March 31, 2024, (c) 3.5 to 1.0 as of the last day of each fiscal quarter ending June 30, 2024 and September 30, 2024 and (d) 3.0 to 1.0 as of the last day of each fiscal quarter thereafter |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||||||
Jan. 01, 2024 | Dec. 20, 2023 | Aug. 01, 2023 | Aug. 27, 2018 | Jul. 31, 2022 | Apr. 30, 2022 | May 31, 2020 | Apr. 30, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Mar. 31, 2024 | Mar. 31, 2023 | Aug. 31, 2023 | Apr. 04, 2022 | |
Loss Contingencies [Line Items] | ||||||||||||||
Cash consideration | $ 16,792,037 | |||||||||||||
Options to acquire shares | 144,191 | |||||||||||||
Weighted exercise price | $ 10.71 | |||||||||||||
Warrants to purchase shares | 4,424 | |||||||||||||
Exercise price | $ 7.32 | |||||||||||||
Expiration date | Apr. 22, 2031 | |||||||||||||
Payments receive | 893,000 | |||||||||||||
cash | $ 693,000 | |||||||||||||
Cash consideration | $ 10,000,000 | |||||||||||||
Number of shares | 486,145 | |||||||||||||
Cash Closing Consideration [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Purchase price | $ 15,250,000 | |||||||||||||
Common Stock [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Warrants to purchase shares | 12,301 | |||||||||||||
Exercise price | $ 12.05 | |||||||||||||
Expiration date | Aug. 10, 2030 | |||||||||||||
Number of shares isssued | 26,143 | |||||||||||||
Precision Healing Inc [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Cash consideration | $ 125,966 | |||||||||||||
Payments receive | $ 10,000,000 | |||||||||||||
Precision Healing [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payments receive | $ 10,000,000 | |||||||||||||
Rochal [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payment of cash | $ 500,000 | |||||||||||||
Accredited Investors [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Issuance of shares | 165,738 | |||||||||||||
Nonaccredited Investors [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Share price | $ 30.75 | |||||||||||||
Precision Healing [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payment in cash | $ 600,000 | |||||||||||||
Share price | $ 27.13 | $ 27.13 | ||||||||||||
Cost of Sales [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty expense | $ 0 | $ 520,814 | ||||||||||||
Sub License Agreement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
License agreement and royalties description | In August 2018, the Company entered an exclusive, world-wide sublicense agreement with CGI Cellerate RX, LLC (“CGI Cellerate RX”) to distribute CellerateRX Surgical and HYCOL products into the surgical and wound care markets. Pursuant to the Sublicense Agreement, the Company pays royalties of 3-5% of annual collected net sales of CellerateRX Surgical and HYCOL. As amended in January 2021, the term of the sublicense extends through May 2050, with automatic successive year-to-year renewal terms thereafter so long as the Company’s Net Sales (as defined in the Sublicense Agreement) each year are equal to or in excess of $1,000,000. If the Company’s Net Sales fall below $1,000,000 for any year after the expiration date, CGI Cellerate RX has the right to terminate the Sublicense Agreement upon written notice. | |||||||||||||
BIAKOS License Agreement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty expense | 35,000 | 32,500 | ||||||||||||
BIAKOS License Agreement [Member] | Rochal Industries LLC [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Increase of royalties payable | 10,000 | |||||||||||||
BIAKOS License Agreement [Member] | Rochal Industries LLC [Member] | Minimum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty percentage | 2% | |||||||||||||
Maximum amount of royalty | $ 130,000 | |||||||||||||
BIAKOS License Agreement [Member] | Rochal Industries LLC [Member] | Maximum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty percentage | 4% | |||||||||||||
Maximum amount of royalty | 150,000 | |||||||||||||
BIAKOS Agreement [Member] | Maximum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Payment for additional royalties | $ 1,000,000 | |||||||||||||
ABF License Agreement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty annual minimum percentage | 10% | |||||||||||||
ABF License Agreement [Member] | Minimum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty percentage | 2% | |||||||||||||
Maximum amount of royalty | $ 50,000 | |||||||||||||
ABF License Agreement [Member] | Maximum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty percentage | 4% | |||||||||||||
Maximum amount of royalty | 75,000 | |||||||||||||
Payment for additional royalties | $ 500,000 | |||||||||||||
Debrider License Agreement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty annual minimum percentage | 10% | |||||||||||||
Payment of cash | $ 1,000,000 | |||||||||||||
Debrider License Agreement [Member] | Minimum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty percentage | 2% | |||||||||||||
Maximum amount of royalty | $ 100,000 | |||||||||||||
Debrider License Agreement [Member] | Maximum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty percentage | 4% | |||||||||||||
Maximum amount of royalty | $ 150,000 | |||||||||||||
Payment for additional royalties | $ 1,000,000 | |||||||||||||
Purchase Agreement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Acquisition consideration transferred | $ 7,600,000 | |||||||||||||
cash | $ 1,600,000 | |||||||||||||
Issuance of common stock for purchase of assets | 291,686 | |||||||||||||
Number of shares isssued | 94,798 | |||||||||||||
Purchase price | $ 7,600,000 | |||||||||||||
Services Agreement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Purchase agreement description | As consideration for the Petito Services, the Owner is entitled to receive: (i) a base salary of $12,000 per month during the term of the Petito Services Agreement, (ii) a royalty payment equal to three percent (3%) of the actual collections from net sales of certain products the Owner develops or codevelops that reach commercialization, (iii) a royalty payment equal to five percent (5%) for the first $50.0 million in aggregate collections from net sales of certain future products and a royalty payment of two and one-half percent (2.5%) on aggregate collections from net sales of certain future products on any amounts exceeding $50.0 million but up to $100.0 million, (iv) $500,000 in cash in the event that 510(k) clearance is issued for any future product accepted by the Company and (v) $1.0 million in cash in the event that a U.S. patent is issued for a certain product; provided that with respect to the incentive payments described in (iv) and (v) of the foregoing, the Owner shall not earn more than $2.5 million. | |||||||||||||
License Agreement [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty expense | $ 50,000 | |||||||||||||
Outstanding units percentage | 10% | |||||||||||||
License Agreement [Member] | Royalty Agreement Terms [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty expense | $ 100,000 | |||||||||||||
License Agreement [Member] | Minimum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty expense percentage | 1.50% | |||||||||||||
License Agreement [Member] | Maximum [Member] | ||||||||||||||
Loss Contingencies [Line Items] | ||||||||||||||
Royalty expense percentage | 3% |
SCHEDULE OF RESTRICTED STOCK AC
SCHEDULE OF RESTRICTED STOCK ACTIVITY (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Equity [Abstract] | |
Non-vested shares, beginning | shares | 144,211 |
Weighted average grant date fair value, beginning | $ / shares | $ 34.07 |
Granted | shares | 105,934 |
Weighted average grant date fair value, granted | $ / shares | $ 37.36 |
Vested | shares | (51,656) |
Weighted average grant date fair value, vested | $ / shares | $ 32.03 |
Forfeited | shares | (5,272) |
Weighted average grant date fair value, forfeited | $ / shares | $ 32.66 |
Non-vested shares, ending | shares | 193,217 |
Weighted average grant date fair value, ending | $ / shares | $ 36.46 |
SCHEDULE OF STOCK OPTION ACTIVI
SCHEDULE OF STOCK OPTION ACTIVITY (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Apr. 30, 2022 | Mar. 31, 2024 | |
Equity [Abstract] | ||
Number of options outstanding, beginning | 93,892 | |
Weighted average exercise price outstanding, beginning | $ 10.22 | |
Granted | 144,191 | |
Weighted average exercise price, Granted | ||
Exercised | (3,059) | |
Weighted average exercise price, Exercised | $ 12.02 | |
Forfeited | ||
Weighted average exercise price, Forfeited | ||
Expired | ||
Weighted average exercise price, Expired | ||
Number of options outstanding, ending | 90,833 | |
Weighted average exercise price outstanding, ending | $ 10.16 | |
Weighted average remaining contract life outstanding | 6 years 7 months 6 days | |
Aggregate intrinsic value, ending | $ 2,438,222.4 | |
Number of options exercisable, ending | 90,833 | |
Weighted average exercise price exercisable, ending | $ 10.16 | |
Weighted average remaining contract life exercisable, ending | 6 years 7 months 6 days | |
Aggregate intrinsic value, exercisable | $ 2,438,222.4 |
SCHEDULE OF WARRANTS TO PURCHAS
SCHEDULE OF WARRANTS TO PURCHASE COMMON STOCK (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Equity [Abstract] | |
Number of warrants outstanding, beginning | shares | 16,725 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 10.80 |
Number of warrants outstanding, beginning | shares | |
Weighted average exercise price outstanding, beginning | $ / shares | |
Number of warrants outstanding, beginning | shares | |
Weighted average exercise price outstanding, beginning | $ / shares | |
Number of warrants outstanding, beginning | shares | |
Weighted average exercise price outstanding, beginning | $ / shares | |
Number of warrants outstanding, beginning | shares | |
Weighted average exercise price outstanding, beginning | $ / shares | |
Number of warrants outstanding, beginning | shares | 16,725 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 10.80 |
Weighted average remaining contract life outstanding | 6 years 6 months |
Number of warrants outstanding, beginning | shares | 16,725 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 10.80 |
Weighted average remaining contract life exercisable, ending | 6 years 6 months |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Aug. 01, 2023 | Aug. 31, 2023 | Feb. 28, 2023 | Jul. 31, 2022 | Apr. 30, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Apr. 04, 2022 | Apr. 30, 2020 | |
Cash consideration | $ 16,792,037 | |||||||||
Options to acquire shares | 144,191 | |||||||||
Weighted exercise price | $ 10.71 | |||||||||
Warrants to purchase shares | 4,424 | |||||||||
Exercise price | $ 7.32 | |||||||||
Payment of contingent consideration | 893,000 | |||||||||
Cash | $ 693,000 | |||||||||
Cash consideration | $ 10,000,000 | |||||||||
Number of shares | 486,145 | |||||||||
Earnout payment | $ 693,000 | |||||||||
Number of shares issued, value | $ 1,033,761 | |||||||||
Stock granted and issued | 100,662 | |||||||||
Restricted stock award, gross | $ 7,830,959 | |||||||||
Share-based compensation | 803,386 | 597,305 | ||||||||
Unrecognized share-based compensation expense | $ 5,859,819 | |||||||||
Unrecognized share-based compensation expense period for recognition | 10 months 24 days | |||||||||
Selling, General and Administrative Expenses [Member] | ||||||||||
Share-based compensation | $ 803,386 | |||||||||
Research and Development Expense [Member] | ||||||||||
Share-based compensation | $ 597,305 | |||||||||
Cash Closing Consideration [Member] | ||||||||||
Payments to acquire assets | $ 15,250,000 | |||||||||
Stock issued during period shares issued for services | 73,809 | |||||||||
Purchase Agreement [Member] | ||||||||||
Issuance of common stock in equity offering, shares | 94,798 | |||||||||
Payments to acquire assets | $ 7,600,000 | |||||||||
Cash | $ 1,600,000 | |||||||||
Issuance of common stock for purchase of assets | 291,686 | |||||||||
Common Stock [Member] | ||||||||||
Issuance of common stock in equity offering, shares | 26,143 | |||||||||
Warrants to purchase shares | 12,301 | |||||||||
Exercise price | $ 12.05 | |||||||||
Number of shares issued, value | $ 26 | |||||||||
Common Stock [Member] | Sales Agreement [Member] | ||||||||||
Issuance of common stock in equity offering, shares | 26,143 | |||||||||
Number of shares issued, value | $ 1,100,000 | |||||||||
Net proceeds | $ 900,000 | |||||||||
Precision Healing [Member] | ||||||||||
Payment in cash | $ 600,000 | |||||||||
Share price | $ 27.13 | $ 27.13 | ||||||||
Cantor Fitzgerald and Co [Member] | Sales Agreement [Member] | ||||||||||
Percentage of commissions payable to sales agent | 3% | |||||||||
Cantor Fitzgerald and Co [Member] | Sales Agreement [Member] | Maximum [Member] | ||||||||||
Sale of stock, consideration received on transaction | $ 75,000,000 | |||||||||
Accredited Investors [Member] | ||||||||||
Accredited investors shares | 165,738 | |||||||||
Nonaccredited Investors [Member] | ||||||||||
Share price | $ 30.75 | |||||||||
Precision Healing Inc [Member] | ||||||||||
Cash consideration | $ 125,966 | |||||||||
Payment of contingent consideration | $ 10,000,000 | |||||||||
Restated 2014 Omnibus Long Term Incentive Plan [Member] | ||||||||||
Number of shares available for issuance | 1,318,841 | |||||||||
Restated 2014 Omnibus Long Term Incentive Plan [Member] | Directors Officers Employees [Member] | ||||||||||
Issuance of common stock in equity offering, shares | 681,159 |
RELATED PARTIES (Details Narrat
RELATED PARTIES (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2021 | Jan. 31, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | |
Consulting Agreement [Member] | Ms Salamone [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Professional fees | $ 177,697 | |||
Cellerate Rx Sub License Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Net sale | $ 1,000,000 | |||
License agreement and royalties description | The Company pays royalties based on the annual Net Sales of licensed products (as defined in the Sublicense Agreement) consisting of 3% of all collected Net Sales each year up to $12,000,000, 4% of all collected Net Sales each year that exceed $12,000,000 up to $20,000,000, and 5% of all collected Net Sales each year that exceed $20,000,000 | |||
Services Agreement [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Cost and expenses related party | $ 56,272 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 3 Months Ended | |||
Apr. 17, 2024 | Mar. 31, 2024 | May 10, 2024 | Dec. 31, 2023 | |
Subsequent Event [Line Items] | ||||
Loan to be borrowed | $ 9,696,562 | $ 9,693,480 | ||
Liquidity amount | 3,000,000 | |||
Annual minimum revenue | 60,000,000 | |||
Annual minimum revenue year one | 75,000,000 | |||
Annual minimum revenue year two | 85,000,000 | |||
Annual minimum revenue year three | 95,000,000 | |||
Annual minimum revenue year four | $ 105,000,000 | |||
Subsequent Event [Member] | Restricted Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Nonvested shares , percentage | 50% | |||
CRG Term Loan Agreement [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Secured term loan | $ 55 | |||
Loan to be borrowed | 15,000,000 | |||
Available borrowing balance | $ 40,000,000 | |||
Borrowing capacity description | each such borrowing must be at least $5.0 million or a multiple of $5.0 million and occur between the Closing Date and June 30, 2025 | |||
Interest rate per annum percentage | 13.25% | |||
Debt instrument interest rate increase decrease percentage | 4% | |||
Cash paid percentage | 8% | |||
Cash paid remaining percentage | 5.25 | |||
Debt instrument interest rate upfront fee percentage | 1.50% | |||
Debt instrument interest rate back end fee percentage | 7% | |||
Debt instrument rate description | (i) if prepayment occurs on or prior to the date that is one year following the applicable borrowing (the “Borrowing Date”), an amount equal to 10.0% of the aggregate outstanding principal amount of the Loan being prepaid and (ii) if prepayment occurs one year after the applicable Borrowing Date and on or prior to two years following the applicable Borrowing Date, an amount equal to 5.0% of the aggregate outstanding principal amount of the CRG Loan being prepaid |