Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | Jul. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q/A | |
Amendment Flag | true | |
Amendment Description | Clearday, Inc. (the “Company”) is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, which was originally filed with the Securities and Exchange Commission (“SEC”) on July 17, 2023 (the “Original Filing”), to amend the Company’s unaudited condensed consolidated financial statements as of March 31, 2023 and make certain other amendments. The Company has previously filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (the “June 10Q”). The amendments provided in this filing have been incorporated in the June 10Q and the Company does not expect to make any amendments to the June 10Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 0-21074 | |
Entity Registrant Name | CLEARDAY, INC. | |
Entity Central Index Key | 0000895665 | |
Entity Tax Identification Number | 77-0158076 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 8800 Village Drive | |
Entity Address, Address Line Two | Suite 106 | |
Entity Address, City or Town | San Antonio | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78217 | |
City Area Code | (210) | |
Local Phone Number | 451-0839 | |
Title of 12(b) Security | Common Stock, par value $0.001 | |
Trading Symbol | CLRD | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,997,628 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 81,429 | $ 195,638 |
Restricted cash | 10,000 | 10,000 |
Accounts receivable, net | 58,447 | 47,705 |
Prepaid expenses | 113,666 | 213,289 |
Other current assets | 466 | |
Total current assets | 264,008 | 466,632 |
Non-current assets | ||
Operating lease right-of-use assets | 22,792,752 | |
Real estate property and equipment, net | 6,321,749 | 6,522,979 |
Intangible assets, net | 3,496,000 | 3,680,000 |
Other long-term assets | 264,251 | 288,155 |
Total assets | 10,346,008 | 33,750,518 |
Current liabilities: | ||
Accounts payable | 3,599,141 | 6,324,002 |
Accrued expenses | 5,989,892 | 8,415,609 |
Derivative liabilities | 3,748,918 | 2,320,547 |
Accrued interest | 895,013 | 294,370 |
Deferred revenue | 13,466 | 901,235 |
Current portion long-term debt | 16,746,935 | 16,347,290 |
Operating lease liabilities | 2,907,605 | |
Total current liabilities | 32,828,102 | 39,323,361 |
Long-term liabilities: | ||
Operating lease liabilities | 24,415,791 | |
Long-term debt, less current portion, net | 4,624,723 | 1,392,940 |
Total liabilities | 37,452,825 | 65,132,092 |
Mezzanine equity | ||
Series F 6.75% Convertible Preferred Stock, $.001 par value, 5,000,000 share authorized, 4,791,401 and 4,797,052 issued and outstanding on March 31, 2023 and December 31, 2022, respectively. Liquidation value $102,380,677 and $101,162,577 on March 31, 2023 and December 31, 2022, respectively. | 22,033,843 | 20,448,079 |
Deficit: | ||
Common Stock, $0.001 par value, 25,194,402 and 20,805,448 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 25,194 | 20,805 |
Additional paid-in-capital | 19,132,830 | 16,098,182 |
Accumulated deficit | (79,606,718) | (79,671,065) |
Clearday, Inc. Stockholders’ deficit: | (60,448,365) | (63,551,749) |
Non-controlling interest in subsidiaries | 11,307,705 | 11,722,096 |
Total deficit | (49,140,660) | (51,829,653) |
TOTAL LIABLITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | 10,346,008 | 33,750,518 |
Series A Convertible Preferred Stock [Member] | ||
Deficit: | ||
Series A Convertible Preferred Stock, $0.001 par value, 2,000,000 shares authorized, 328,925 and 328,925 shares issued and outstanding, as of March 31, 2023 and December 31, 2022, respectively. Liquidation value of $329 and $329 on March 31, 2023 and December 31, 2022, respectively | 329 | 329 |
Related Party [Member] | ||
Current liabilities: | ||
Other current liabilities | 738,725 | 672,597 |
Nonrelated Party [Member] | ||
Current liabilities: | ||
Other current liabilities | $ 1,096,012 | $ 1,140,106 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Preferred stock dividend rate percentage | 6.75% | 6.75% |
Temporary equity, par value | $ 0.001 | $ 0.001 |
Temporary equity, shares authorized | 5,000,000 | 5,000,000 |
Temporary equity, shares issued | 4,791,401 | 4,797,052 |
Temporary equity, shares outstanding | 4,791,401 | 4,797,052 |
Temporary equity, liquidation preference | $ 102,380,677 | $ 101,162,577 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares issued | 25,194,402 | 20,805,448 |
Common stock, shares outstanding | 25,194,402 | 20,805,448 |
Series A Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 328,925 | 328,925 |
Preferred stock, shares, outstanding | 328,925 | 328,925 |
Preferred stock, liquidation preference, value | $ 329 | $ 329 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
REVENUES | ||
Total revenues | $ 3,006,504 | $ 3,210,218 |
OPERATING EXPENSES | ||
Wages & general operating expenses | 3,846,475 | 4,634,056 |
Selling, general and administrative expenses | 904,989 | 1,393,370 |
Depreciation and amortization expense | 296,826 | 187,215 |
Total operating expenses | 5,048,290 | 6,214,641 |
Operating loss | (2,041,786) | (3,004,423) |
Other (income) expenses | ||
Interest expense | 714,833 | 501,598 |
PPP loan forgiveness | (642,816) | |
Derivative financing costs | 2,567,460 | |
Changes in fair value of derivative | (1,565,232) | |
Loss on disposal of assets | 106,467 | |
Gain on termination of lease | (4,530,644) | |
Extinguishment of debt | 653,814 | |
Other income | 498,124 | (143,889) |
Total other income | (1,555,178) | (285,107) |
Net loss from continuing operations | (486,608) | (2,719,316) |
Loss from discontinued operations, net of tax | (85,227) | |
Net loss | (486,608) | (2,804,543) |
Net loss attributable to non-controlling interest | (550,955) | (144,265) |
Preferred stock dividend | (1,698,784) | (1,619,015) |
Net loss attributable to Clearday, Inc. common stockholders | (2,736,347) | (4,567,823) |
Resident Fee [Member] | ||
REVENUES | ||
Total revenues | 2,895,326 | 3,124,761 |
Adult Day Care [Member] | ||
REVENUES | ||
Total revenues | 89,041 | 83,896 |
Commercial Property Rental Revenue [Member] | ||
REVENUES | ||
Total revenues | $ 22,137 | $ 1,561 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net loss per share from continued operations, basic | $ (0.11) | $ (0.29) |
Net loss per share from continued operations, diluted | (0.11) | (0.29) |
Net loss per share from discontinued operations, basic | 0 | (0.01) |
Net loss per share from discontinued operations, diluted | 0 | (0.01) |
Net loss per share, basic | (0.11) | (0.30) |
Net loss per share, diluted | $ (0.11) | $ (0.30) |
Weighted average common shares outstanding, basic | 23,910,818 | 15,010,907 |
Weighted average common shares outstanding, diluted | 23,910,818 | 15,010,907 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Mezzanine Equity, Convertible Preferred Stock and Stockholders' Deficit (Unaudited) - USD ($) | Temporary Equity Series F [Member] | Series A Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Parent [Member] | Noncontrolling Interest [Member] | Total |
Balance at Dec. 31, 2021 | $ 16,857,267 | $ 329 | $ 14,915 | $ 17,069,481 | $ (65,208,327) | $ (48,123,602) | $ 11,330,695 | $ (36,792,907) |
Balance, shares at Dec. 31, 2021 | 4,797,052 | 328,925 | 14,914,458 | |||||
PIK dividends accruals on Convertible Preferred Stock F | $ 1,619,015 | (1,619,015) | (1,619,015) | (1,619,015) | ||||
PIK dividends accruals on Convertible Preferred Stock F, shares | ||||||||
Series F Incentive Common Stock | $ 2,859 | (2,853) | 6 | 6 | ||||
Series F Incentive Common Stock, shares | 2,861,334 | |||||||
Accrued of series I Convertible Preferred Stock in subsidiary | 136,564 | 136,564 | ||||||
Series I adjustment | (669,904) | (669,904) | (669,904) | |||||
Stock Compensation for services | ||||||||
Shares issued for Loan | ||||||||
Dissolution of Longhorn Hospitality | (3,871,239) | 3,871,239 | ||||||
Redemption of series F shares | ||||||||
Officer Compensation and debt conversion | ||||||||
Net loss | (2,804,543) | (2,804,543) | (144,265) | (2,948,808) | ||||
Balance at Mar. 31, 2022 | $ 18,476,282 | $ 329 | $ 17,774 | 11,576,374 | (64,811,535) | (53,217,058) | 11,322,994 | (41,894,064) |
Balance, shares at Mar. 31, 2022 | 4,797,052 | 328,925 | 17,775,792 | |||||
Balance at Dec. 31, 2022 | $ 20,448,079 | $ 329 | $ 20,805 | 16,098,182 | (79,671,065) | (63,551,749) | 11,722,096 | (51,829,653) |
Balance, shares at Dec. 31, 2022 | 4,797,052 | 328,925 | 20,805,448 | |||||
PIK dividends accruals on Convertible Preferred Stock F | $ 1,698,784 | (1,698,784) | (1,698,784) | (1,698,784) | ||||
Series F shares converted to common stock | $ (113,020) | $ 13 | 113,007 | 113,020 | 113,020 | |||
Series F shares converted to common stock, shares | (5,651) | 13,449 | ||||||
Accrued of series I Convertible Preferred Stock in subsidiary | 136,564 | 136,564 | ||||||
Debt discount from derivative settlements | 713,435 | 713,435 | 713,435 | |||||
Stock issued for extinguishment of liabilities | $ 4,218 | 3,897,578 | 3,901,796 | 3,901,796 | ||||
Stock issued for extinguishment of liabilities, shares | 4,218,158 | |||||||
Stock Compensation for services | $ 75 | (61,191) | (61,116) | (61,116) | ||||
Stock compensation for services, shares | 74,187 | |||||||
Shares issued for Loan | $ 83 | 70,603 | 70,686 | 70,686 | ||||
Shares issued for Loan, shares | 83,160 | |||||||
Net loss | 64,347 | 64,347 | (550,955) | (486,608) | ||||
Balance at Mar. 31, 2023 | $ 22,033,843 | $ 329 | $ 25,194 | $ 19,132,830 | $ (79,606,718) | $ (60,448,365) | $ 11,307,705 | $ (49,140,660) |
Balance, shares at Mar. 31, 2023 | 4,791,401 | 328,925 | 25,194,402 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (486,608) | $ (2,804,543) | |
Loss from discontinued operations, net of tax | (85,227) | ||
Net loss from continuing operations | (486,608) | (2,719,316) | |
Adjustments required to reconcile net loss to cash flows used in operating activities | |||
Depreciation and amortization | 296,826 | 187,215 | |
Amortization of right of use assets | 459,750 | ||
Shares issued for loan commitment | 70,686 | ||
Shares issued for services | (61,116) | ||
Financing costs from derivative liabilities | 2,567,460 | ||
Gain on termination of leases | (4,530,644) | ||
Series I preferred stock accumulated dividend | 136,564 | ||
Loss on the sale of fixed assets | 106,467 | ||
Bad debt expense | 179,854 | ||
Change in fair value of the derivatives | (1,565,232) | ||
Amortization of debt issuance costs | 241,504 | 501,970 | |
Amortization of discount on derivatives | 540,760 | ||
Loss on extinguishment of debt | 653,814 | ||
Gain on PPP loan forgiveness | (642,816) | ||
Changes in operating assets and liabilities | |||
Accounts receivable | (190,596) | 6,145 | |
Other current assets | 23,438 | ||
Prepaid expenses | 99,623 | (433,839) | |
Accounts payable | 523,121 | 902,548 | |
Accrued expenses | (181,935) | ||
Accrued liabilities | 1,193,472 | ||
Deferred revenue | (887,769) | ||
Related party payable | 66,128 | ||
Other current liabilities | (44,094) | 113,000 | |
Change in operating lease liability | (227,777) | ||
Net cash used in operating activities of continuing operations | (1,066,342) | (2,035,055) | |
Net cash used in activities of discontinued operations | (45,421) | ||
Net cash used in operating activities | (1,066,342) | (2,080,476) | $ (3,978,027) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Payments for property and equipment | (18,063) | (13,348) | |
Net cash used in investing activities of continuing operations | (18,063) | (13,348) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Repayment of debt | (977,263) | ||
Proceeds from long-term debt | 1,619,316 | ||
Payment of long-term debt | (649,121) | ||
Payments on lease obligations | 12,929,498 | ||
Borrowings on debt, net | 2,130,268 | ||
Net cash provided by financing activities | 970,195 | 14,082,503 | |
Change in cash and restricted cash from continuing operations | (114,209) | (895,398) | |
Change in cash and restricted cash from discontinued operations | 56,159 | ||
Cash and restricted cash at beginning of the year | 205,638 | 975,075 | 975,075 |
Cash and restricted cash at end of year | 91,429 | 135,836 | 205,638 |
Beginning of period | |||
Cash and cash equivalents | 81,429 | 125,836 | 195,638 |
Restricted cash | 10,000 | 10,000 | 10,000 |
Total cash and restricted cash | 91,429 | 135,836 | 205,638 |
Cash and cash equivalents | 195,638 | 965,075 | 965,075 |
Restricted cash | 10,000 | 10,000 | 10,000 |
Total cash and restricted cash | 205,638 | 975,075 | $ 975,075 |
Supplemental disclosures of cash flow information | |||
Cash paid for interest | 649,121 | ||
Cahs paid for income taxes | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Settlements on derivative liability | 713,435 | ||
PIK dividends for Series F preferred stock | 1,698,784 | ||
Converted Preferred Shares Series F to Common Shares | 113,020 | ||
Discount on derivative liability | 1,139,578 | ||
Termination of leases | 27,323,396 | ||
Accounts payable exchanged for common shares | 3,247,982 | ||
Notes payable used to pay rent expense | $ 3,018,547 |
Description of Business and Goi
Description of Business and Going Concern | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Description of Business and Going Concern | 1. Description of Business and Going Concern Organization, Description of Business Clearday, Inc., a Delaware corporation (the “Company”), formerly known as Superconductor Technologies Inc. (“STI”), was established in 1987 and closed a merger (“AIU Merger”) with Allied Integral United, Inc., a Delaware corporation (“AIU”), on September 9, 2021. The Company continued the businesses of AIU and continued one of the businesses of STI. AIU was incorporated on December 20, 2017, and began its business on December 31, 2018 when it acquired memory care residential facilities and other businesses (the “2018 Acquisition”) that was conducted since November 2010. Since the 2018 Acquisition, the Company has been developing innovative care and wellness products and services focusing on the longevity market, including its Longevity-tech platform. In the first quarter of 2023, the Company disposed of three of its four full time memory care communities to focus on its digital care services, including robotics and its Longevity care platform. Going Concern As of March 31, 2023, we have an accumulated deficit of $ 79,606,718 486,608 1,066,342 14,462,738 3,978,027 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the interim reporting rules of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s latest Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments (unless otherwise indicated), necessary for a fair presentation of the financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company, including its wholly owned subsidiaries. In 2019, AIU Alternative Care, Inc., a Delaware corporation (“AIU Alt Care”) and Clearday Alternative Care Oz Fund, L.P, a Delaware limited partnership (“Clearday OZ Fund”), were formed. The Company owns all of the voting interests of AIU Alt Care and the sole general partner of Clearday OZ Fund, and less than 1 In November 2019, AIU Alt Care filed a certificate of designation that authorized preferred stock designated as the Series I 10.25 0.01 1,500,000 700,000 1,500,000 10.00 897,000 89,700 In October 2019, AIU Alt Care formed AIU Impact Management, LLC and Clearday OZ Fund were formed. AIU Impact Management, LLC manages Clearday OZ Fund as its general partner, owns 1 99 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The exchange rate for each of the Alt Care Preferred Stock and the Clearday OZ LP Interests are equal to (i) the aggregate investment amount for such security plus accrued and unpaid dividends at 10.25% per annum, (ii) divided by 80% of the 20 consecutive day volume weighted closing price of the Common Stock of Clearday preceding the conversion date. The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the balance sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common stockholders on the face of the statement of operations. Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Classification of Convertible Preferred Stock The Company applied ASC 480, “Distinguishing Liabilities from Equity”, and revised the condensed consolidated financial statement presentation of its convertible preferred stock whose redemption is outside the control of the issuer. Registrants having such securities outstanding are required to present separately, in balance sheets, amounts applicable to the following three general classes of securities: (i) preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer; (ii) preferred stocks which are not redeemable or are redeemable solely at the option of the issuer; and (iii) common stocks. In addition, the rules require disclosure of redemption terms, five-year maturity data, and changes in redeemable preferred stock. Use of Estimates The Company’s condensed consolidated financial statement preparation requires that management make estimates and assumptions which affect the reporting of assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements in conformity with GAAP. Actual results could differ from those estimates. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as two operating segments, the Longevity-tech Platform and personal care. Cash, and Restricted Cash Cash, consisting of short-term, highly liquid investments and money market funds with original maturities of three months or less at the date of purchase, are carried at cost plus accrued interest, which approximates market value. Restricted cash includes cash that the Company deposited as security for obligations arising from property taxes, property insurance and replacement reserve the Company is required to establish escrows as required by its mortgages and certain resident security deposits. Accounts Receivable The Company records accounts receivable at their estimated net realizable value. Additionally, the Company estimates allowances for uncollectible amounts based upon factors which include, but are not limited to, historical payment trends, write-off experience, and the age of the receivable as well as a review of specific accounts, the terms of the agreements, the residents, the payers’ financial capacity to pay and other factors which may include likelihood and cost of litigation. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Real Estate Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to operations as incurred. Depreciation and amortization are based on the straight-line method over the estimated useful lives of the related assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts, and any resulting gain or loss is reflected in operations in the period realized. Depreciation is computed on the straight-line method with useful lives as follows: Schedule of Estimated Useful Lives Asset Class Estimated Useful Life (in years) Buildings and building improvements 39 Leasehold improvements 15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 Intangible Assets, Net Software Capitalization With regards to developing software, any application costs incurred during the development state, both internal expenses and those paid to third parties are capitalized and amortized per FASB Topic ASC350-40 (“Internal-Use Software Accounting & Capitalization”) . Once the software has been developed, the costs to maintain and train others for its use will be expensed. With regards to developing software, any application costs incurred during the development state, both internal expenses and those paid to third parties are capitalized and amortized based on the estimated useful life of five years Impairment Assessment The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an assets’ carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. Revenue Recognition The Company recognizes revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers”, or ASC Topic 606, using the practical expedient in paragraph 606-10-10-4 that allows for the use of a portfolio approach, because we have determined that the effect of applying the guidance to our portfolios of contracts within the scope of ASC Topic 606 on our condensed consolidated financial statements would not differ materially from applying the guidance to each individual contract within the respective portfolio or our performance obligations within such portfolio. The five-step model defined by ASC Topic 606 requires the Company to: (i) identify its contracts with customers, (ii) identify its performance obligations under those contracts, (iii) determine the transaction prices of those contracts, (iv) allocate the transaction prices to its performance obligations in those contracts and (v) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A substantial portion of the Company’s revenue from its independent living and assisted living communities relates to contracts with residents for services that are generally under ASC Topic 606. The Company’s contracts with residents and other customers that are within the scope of ASC Topic 606 are generally short-term in nature. The Company has determined that services performed under those contracts are considered one performance obligation in accordance with ASC Topic 606 as such services are regarded as a series of distinct events with the same timing and pattern of transfer to the resident or customer. Revenue is recognized for those contracts when the Company’s performance obligation is satisfied by transferring control of the service provided to the resident or customer, which is generally when the services are provided over time. Resident fees at our residential communities consist of regular monthly charges for basic housing and support services and fees for additional requested services, such as assisted living services, personalized health services and ancillary services. Fees are specified in our agreements with residents, which are generally short term (30 days to one year), with regular monthly charges billed in advance. Funds received from residents in advance of services provided are not material to our condensed consolidated financial statements. Some of our senior living communities require payment of an upfront entrance fee in advance of a resident moving into the community; substantially all these community fees are non-refundable and are initially recorded as deferred revenue and included in accrued expenses and other current liabilities in our consolidated balance sheets. These deferred amounts are then amortized on a straight-line basis into revenue over the term of the resident’s agreement. When the resident no longer resides within our community, the remaining deferred non-refundable fees are recognized in revenue. Revenue recorded and deferred in connection with community fees is not material to our condensed consolidated financial statements. Revenue for basic housing and support services and additional requested services is recognized in accordance with ASC Topic 606 and measured based on the consideration specified in the resident agreement and is recorded when the services are provided. Resident Care Contracts Resident fees at the Company’s senior living communities may consist of regular monthly charges for basic housing and support services and fees for additional requested services and ancillary services. Fees are specified in the Company’s agreements with residents, which are generally short term (30 days to one year), with regular monthly charges billed on the first of the month. Funds received from residents in advance of services are not material to the Company’s condensed consolidated financial statements. Below is a table that shows the breakdown by percentage of revenues related to contracts with residents versus resident fees for support or ancillary services. Schedule of Revenue from Contract with Customers For the periods ended March 31, 2023 % 2022 % Revenue from contracts with customers: Resident rent - over time $ 2,895,326 96 % $ 3,124,761 97 % Day care 89,041 3 % 83,896 3 % Amenities and conveniences - point in time 22,137 1 % 1,561 0 % Total revenue from contracts with customers $ 3,006,504 100 % $ 3,210,218 100 % Financial Instruments In accordance with the reporting requirements of the FASB ASC Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the condensed consolidated financial statements when the fair value is different than the carrying value of those financial instruments. The Company does not have assets or liabilities measured at fair value on a recurring basis except its derivative liability. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held during the periods presented, except as disclosed. Fair Value Measurement ASC Topic 820, “Fair Value Measurements”, provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 - Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value. The following tables present the Company’s assets and liabilities that were measured and recognized at fair value as of March 31, 2023 and December 31, 2022: Schedule of Assets and Liabilities Measured at Fair Value March 31, 2023 Level 1 Level 2 Level 3 Total Derivative liability - - $ 3,748,918 $ 3,748,918 December 31, 2022 Level 1 Level 2 Level 3 Total Derivative liability - - $ 2,320,547 $ 2,320,547 Under the Company’s contract ordering policy, the Company first considers common shares issued and outstanding as well as reserved but unissued equity awards, such as under an equity award program. All remaining equity linked instruments such as, but not limited to, options, warrants, and debt and equity with conversion features are evaluated based on the date of issuance. If the number of shares which may be issued under the Company’s agreements exceed the authorized number of shares or are unable to be determined, equity linked instruments from that date forward are considered to be derivative liabilities until such time as the number of shares which may be issued under the Company’s agreements no longer exceed the authorized number of shares and are able to be determined. The Company has outstanding note agreements containing provisions meeting the definition of a derivative liability which therefore require bifurcation. Further, pursuant to the Company’s contract ordering policy, any issuance of equity linked instruments subsequent to the initial triggering agreement will result in derivative liabilities. At March 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $ 0.51 3.60 4.94 182 421 0.35 0.43 At December 31, 2022, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $ 0.56 3.99 4.76 183 572 0.35 0.75 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A reconciliation of the changes in the Company’s Level 3 derivative liability at fair value is as follows: Summary of Activity of Level 3 Liabilities Balance - December 31, 2022 $ 2,320,547 Additions 3,707,038 Settlements (713,435 ) Change in fair value (1,565,232 ) Balance - March 31, 2023 $ 3,748,918 Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC Topic 815, “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. Research and Development Costs Research and development costs are charged to expense as incurred and are included in operating expenses. There were no research and development costs incurred in the three months ended March 31, 2023 or 2022. Advertising Costs The costs of advertising are expensed as incurred. Advertising expenses are included in the Company’s operating expenses. There were no advertising expenses in the three months ended March 31, 2023 or 2022. Lease Accounting The Company follows ASC Topic 842, “Leases”. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. All ROU assets were written off effective March 31, 2023, when the Company disposed of the three leased properties described in Note 5 Leases. Income Taxes The Company’s income tax expense includes U.S. income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences to be included in the Company’s condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, while the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The Company can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income, and, to the extent, the Company believes that the Company is more likely than not that all or a portion of deferred tax assets will not be realized, the Company establishes a valuation allowance to reduce the deferred tax assets to the appropriate valuation. Company includes the related tax expense or tax benefit within the tax provision in the condensed consolidated statement of operations in that period. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the future, if the Company determines that it would be able to realize its deferred tax assets in excess of their net recorded amount, the Company will make an adjustment to the deferred tax asset valuation allowance and record an income tax benefit within the tax provision in the condensed consolidated statement of operations in that period. The Company pays franchise taxes in certain states in which it has operations. The Company has included franchise taxes in general and administrative and operating expenses in its condensed consolidated statements of operations. Earnings Per Share FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Commitments and Contingencies The Company has been, is currently, and expects in the future to be involved in claims, lawsuits, and regulatory and other government audits, investigations and proceedings arising in the ordinary course of the Company’s business, some of which may involve material amounts. The Company establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Also, the defense and resolution of these claims, lawsuits, and regulatory and other government audits, investigations and proceedings may require the Company to incur significant expense. The Company accounts for claims and litigation losses in accordance with ASC Topic 450, “Contingencies”. Under ASC Topic 450, loss contingency provisions are recorded for probable and estimable losses at the Company’s best estimate of a loss or, when a best estimate cannot be made, at the Company’s estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment, and are refined as additional information becomes known. Accordingly, the Company is often initially unable to develop a best estimate of loss and therefore the estimated minimum loss amount, which could be zero, is recorded; then, as information becomes known, the minimum loss amount is updated, as appropriate. Occasionally, a minimum or best estimate amount may be increased or decreased when events result in a changed expectation. Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (a) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (b) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (c) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share for convertible instruments by using the “if-converted” method. In addition, entities must presume share settlement for purposes of calculating diluted earnings per share when an instrument may be settled in cash or shares. For smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact that ASU 2020-06 may have on its financial statements and related disclosures. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As of March 31, 2023, there were several new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s condensed consolidated financial statements. |
Real Estate, Property and Equip
Real Estate, Property and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Real Estate, Property and Equipment | 3. Real Estate, Property and Equipment The Company’s real estate, property and equipment consisted of the following at the respective balance sheet dates: Schedule of Real Estate, Property and Equipment March 31, December 31, Land $ 2,231,879 $ 2,231,879 Building and building improvements 4,975,243 4,975,243 Leasehold Improvements 710,317 846,754 Computers 57,192 332,809 Furniture, fixtures, and equipment 72,213 1,379,219 Other Equipment 74,937 518,145 Work in progress 138,187 138,187 Total 8,259,968 10,422,236 Less accumulated depreciation (1,938,219 ) (3,899,257 ) Real estate, property and equipment, net $ 6,321,749 $ 6,522,979 The Company recorded depreciation and amortization expenses relating to real estate, property, and equipment in the amount of $ 112,826 and $ 501,797 for the periods ended March 31, 2023, and December 31, 2022, respectively. |
Intangible Assets, Net
Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | 4. Intangible Assets, Net Software Capitalization. With regards to developing software, any application costs incurred during the development state, both internal expenses and those paid to third parties are capitalized and amortized per FASB Topic ASC350-40 (“Internal-Use Software Accounting & Capitalization”). Once the software has been developed, the costs to maintain and train others for its use will be expensed. At March 31, 2023 and March 31, 2022, $ 3,496,000 2,240,000 five years Acquired intangible assets subject to amortization are as follows: Schedule of Expected Future Amortization Expense for Intangible Assets March 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life (Years) Developed technology $ 3,680,000 $ 184,000 $ 3,496,000 4.75 Expected future amortization expense for intangible assets as of March 31, 2023 is as follows: Schedule of Future Amortization Expense for Intangible Assets Fiscal Years 2023 (remaining) $ 552,000 2024 736,000 2025 736,000 2026 736,000 2027 736,000 Thereafter - Total $ 3,496,000 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Weighted-Average Remaining Useful Life (Years) Developed technology $ 2,240,000 $ - $ 2,240,000 5.75 The Company recorded amortization expense related to its intangible assets in the amounts of $ 184,000 0 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases | |
Leases | 5. Leases Lease Terminations On March 31, 2023, the Company entered into agreements (collectively, the “Lease Termination Agreement”) to terminate the leases (“Community Leases”) for three of its four residential care facilities, which account for all of Clearday’s leased residential care facilities. The Community Leases related to residential communities (the “Communities”) located in Westover, Texas, New Braunfels, Texas and Little Rock, Arkansas. Terminating the Community Leases will remove Right of Use liabilities and right of use assets related to these Community Leases, as of December 31, 2022 and the write-off or elimination of the related net leasehold improvements and personal property in these Communities. As of March 31, 2023, we had no material economic rights or obligations under the Community Leases other than for payment obligations under the Lease Termination Agreements. The tenants of the Community Leases and the guarantors, including Clearday, Inc., entered a Lease Transition Agreement with the Lessor of the properties dated March 31, 2023. The Lease Transition Agreement provided, among other matters, that the aggregate liability of the Clearday subsidiaries that are tenants under the Community Leases are reduced to amount (the “Repayment Amount”) that is equal to the sum of: (1) past due rent payments under the Community Leases of $ 1,284,770 1,710,777 275,000 25,000 10 300,000 500,000 300,000 400,000 10 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS In connection with the Lease Termination Agreements, the tenants under the Community Leases and the Clearday, Inc. subsidiaries that operated the Communities signed a promissory note for the Repayment Amount and the Past Due Community Lease Amounts and Clearday, Inc. agreed to be an additional guarantor of the obligations of the Community Leases, as modified and limited by the Community Lease Transition Agreement, which is less than approximately $ 4,000,000 In connection with the proposed termination of the Community Leases, the subsidiaries that operate the Communities (the “Current Operators”) and subsidiaries of the New Operator (“New Communities Operators”) entered into the Operations Transfer Agreement dated as of April 1, 2023 (the “OTA”). The OTA provides that the New Communities Operators will purchase the personal property and other assets of the Current Operators used at the Communities to enable the New Communities Operators to conduct their business at the Communities under new leases or other arrangements with the Landlord. Such purchase and sale will close on the date that the New Communities Operators receive the licenses, authorizations and approvals from the applicable Texas and Arkansas governmental agencies to conduct a licensed residential memory care business at the Communities and they enter into new leases with the Landlord (the “Commencement Date”). The New Communities Operators will enter into new agreements with the residents at the Communities, effective the Commencement Date, which agreements, according to statements by the New Communities Operators, will be at the same price as the rates charged by Current Operators. The Current Operators have provided a notice to each of the residents at the Communities that their current agreement will terminate, effective the Commencement Date. In connection with the OTA, the Current Operators and the New Communities Operators entered into Interim Management and Security Agreements or an Interim Consulting and Security Agreement, as applicable, dated as of April 1, 2023 (the “Interim Agreements”). The Interim Agreements provide that the New Communities Operators will assist with operating the Communities as an independent contractor, pending their receipt of government authorizations and approvals necessary to operate memory care residential care businesses at the Communities. The New Communities Operators are not affiliated with the Company or its officers or directors. The OTA and Interim Agreements provide for the asset purchase and sale of the memory care businesses at the Communities, and the transfer of certain agreements and the assumption of certain specified liabilities. The Current Operators, each of which is a subsidiary of Clearday, Inc., remain obligated for liabilities that are not assumed by the New Operators. Under the Interim Agreements, the New Communities Operators is an independent contractor that has employed, or offered employment to, all of the employees of the Current Operators at the Communities and will fund and be responsible for any operating cash losses for the Communities. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 6. Discontinued Operations The following statement is the condensed consolidated statement of operations for the Company’s discontinued operations for the period ended March 31, 2022: Schedule of Discontinued Operations for Consolidated Statement of Operations REVENUES Commercial property rental revenue $ 14,239 Total revenues, net 14,239 Costs and expenses Operating expenses - General and administrative expenses 36,636 Total operating expenses $ 36,636 Loss from operations (22,307 ) Other/(income) expenses Interest expense 44,151 Gain on disposal of assets - Equity income from investees, net of applicable taxes - Impairment expense (recovery) - Other (income) expenses 18,768 Total (income)/expense 62,920 Net loss $ (85,227 ) |
Indebtedness
Indebtedness | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Indebtedness | 7. Indebtedness As of March 31, 2023 and December 31, 2022, the current portion of long-term debt within the Company’s financial statements was $ 16,746,935 and $ 16,347,290 , respectively. During the periods ended March 31, 2023 and 2022, we incurred interest expenses totaling $ 714,833 501,598 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following table summarizes the Company’s debt as of March 31, 2023 and December 31, 2022: Schedule of Long Term Debt As of March 31, Total 2022 6,839,277 2023 9,635,591 2024 1,494,886 2025 4,461,182 Thereafter 494,900 Total obligations $ 22,925,835 Indebtedness of Facilities Schedule of Maturity Debt Maturity Date Interest Rate March 31, December 31, 2022 Naples Equity Loan ^ May 2023 9.95 % $ 4,550,000 $ 4,550,000 Gearhart Loan ^ December 2022 7.00 % 193,578 193,578 SBA PPP Loans # February 2022 1.00 % 1,518,682 1,518,682 Bank Direct Payable ^ December 2022 3.13 % 31,569 80,381 AIU Sixth Street February 2023 12.00 % - 49,593 1800 Diagonal Lending October 2024 12.00 % 93,408 116,760 1800 Diagonal Lending February 2024 12.00 % 173,594 - Equity Secure Fund I, LLC* June 2022 11.50 % 1,000,000 1,000,000 Invesque July 2025 10.00 % 3,458,504 - Merchant Cash Advance Loans (^^) Naples Operating PIRS Capital March 2023 0.00 % $ 338,000 $ 338,000 Little Rock Libertas February 2023 0.00 % 326,330 326,330 PIRS Capital Financing Agreement March 2023 0.00 % 144,659 144,659 Naples Samson #1 May 2023 0.00 % 76,916 76,916 Naples LG Funding #2 April 2023 0.00 % 171,170 171,170 Little Rock Premium Funding April 2023 0.00 % 211,313 211,313 Little Rock KIT Funding December 2022 0.00 % 89,400 89,400 Little Rock Samson Funding #4 February 2023 0.00 % 170,501 170,501 Naples Operating SWIFT December 2022 0.00 % 111,750 111,750 New Braunfels Samson Cloud Fund February 2023 0.00 % 308,035 308,035 New Braunfels Samson Group February 2023 0.00 % 375,804 375,804 Westover Hills One River December 2022 0.00 % 128,298 128,301 Westover Hills FOX Capitol March 2023 0.00 % 109,384 109,384 Westover Hills Arsenal October 2023 0.00 % 95,882 95,882 Westover Samson Funding March 2023 0.00 % 267,754 267,754 Notional amount of debt 13,944,531 10,434,193 Less: current maturities 13,944,531 10,434,193 $ - $ - CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Indebtedness Allocated to Assets Held For Sale Real Estate: Artesia Note June 2033 Variable $ - $ 211,721 Carpenter Enterprises Demand Note Variable 300,000 300,000 Leander Stearns National Association ^ February 2023 10.38 % 805,000 805,000 Notional amount of debt 1,105,000 1,316,721 Less: current maturities 805,000 805,000 $ 300,000 $ 511,721 Other (Corporate) Indebtedness AGP Contract ^ March 2023 5.00 % $ 550,000 $ 550,000 Cibolo Creek Partners December 2025 0.09 % 411,470 $ 421,470 Cibolo Creek Partners promissory note December 2025 0.09 % 91,208 96,208 EIDL SBA Treas 310 December 2051 3.75 % 494,900 494,900 Firstfire May 2023 12.00 % 37,195 95,054 Five C’s Loan ^ December 2022 9.85 % 325,000 325,000 GS Capital May 2023 12.00 % 12,048 50,955 Jefferson Street Capital LLC May 2023 12.00 % 33,600 84,000 KOBO, L.P. ^ October 2023 Floating % 500,000 500,000 Mast Hill LP May 2023 12.00 % 300,000 420,000 Mast Hill LP July 2023 12.00 % 252,000 315,000 Round Rock Development Partners Note December 2025 0.09 % 500,000 500,000 Jefferson Street Capital LLC (February 2023) February 2024 12.00 % 192,883 - Mast Hill LP (January 2023) January 2024 12.00 % 756,000 - Convertible Notes Issued by AIU Alternative Care, Inc. January 2024 12.00 % 279,000 - Notional amount of debt 4,735,304 3,852,587 Less: current maturities 2,009,843 2,340,009 $ 2,725,461 $ 1,512,578 TIC Purchase Agreements No Specified Date 8.00 % $ 3,141,000 $ 3,141,000 Total 22,925,835 18,744,501 Less Debt Discount & Derivatives (1,554,177 ) (1,004,271 ) Total $ 21,371,658 $ 17,740,230 ^ Obligation is in default. The interest rate noted above is the stated rate of interest and does not reflect the default rate of interest. ^^ We have ceased payment of these obligations. Obligations are subject to litigation for nonpayment, as previously reported. See Note 8 Commitments and Contingencies. # SBA PPP obligations are past due and in the Company is continuing the process to have these obligations forgiven. Obligation is in payment default. Each lender has not exercised any of their remedies and the Company continues to negotiate with each lender a payment schedule. The interest rate noted above is the stated rate of interest and does not reflect the default rate of interest. Subsequently, each lender has provided a forbearance of their remedies which was in effect as of the date of this Report. * Obligations have been modified as described in Note 13 Subsequent Events. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Mast Hill Financing – January 2023 On January 13, 2023, the Company incurred a loan in the principal amount of $ 756,000 75,600 68,040 12,000 213,000 12 16 January 26, 2024 75,600 10 750 83,160 1,134,000 0.75 851,000 0.75 0.50 (1) a bona fide offer of capital or financing from a nationally recognized broker dealer that is retained by Borrower and acceptable to the Holder, which acceptance will not be unreasonably delayed, withheld or conditioned (“Investment Banker”), or any person or party that is introduced to the Company by the Investment Banker in its capacity as a placement agent, (ii) a bona fide offer of capital or financing from a person or party if such capital or financing is used by the Company for the acquisition or refinance of real property so long as (a) any security interest granted to such person or party is solely limited to the real property being acquired or refinanced and (b) such person or party shall have no rights at any time in such transaction or any related transaction to acquire Common Stock or Common Stock Equivalents of the Company (each a “Real Property Transaction”), as well as (iii) a bona fide offer of specified capital or financing through certain financing transactions. MH Loan 1 Note is subject to repayment from the use of proceeds of certain transactions. If, prior to the full repayment or satisfaction of the MH Loan 1 Note’s obligations, the Company receives cash proceeds of more than $2,000,000.00 (the “Minimum Threshold”) in the aggregate, from the sale of assets or issuance of the Company’s securities, including pursuant to an Equity Line of Credit (as defined in MH Loan 1 Note), then the Lender may require us to apply up to 50% of such proceeds after the Minimum Threshold to repay all or any portion of the outstanding obligation under the Note; provided that such repayment obligation is not applicable to Real Property Transactions, the sale of assets to customers of the Company in the ordinary course of business, the sale of interests in real estate, or any Small Business Administration Economic Injury Disaster Loan. Additionally, the Company provided the lender with rights to receive terms provided under any other financing transaction that are more favorable than under MH Loan 1 Note, other than Real Property Transactions and certain other transactions. 1800 Diagonal Lending – February 2023 On February 10, 2023, the Company issued an unsecured promissory note (the “1800 Note”) to an institutional lender in the aggregate amount of $ 194,360 20,824 19,280 150,000 4,250 19,286 194,360 12 The 1800 Note provides for a one-year maturity. Monthly payments on the 1800 Note of approximately $ 21,768 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Upon any Event of Default, the obligations under the 1800 Note will accrue interest at an annual rate of 22% and, if such Event of Default is continuing at any time that is 180 days after the date of the 1800 Note, provide the 1800 Noteholder the right and option to convert the obligations under the 1800 Note to shares of Clearday’s common stock. The price for any such conversion is equal to 75% (or a 25% discount) of the average of the five (5) lowest per share daily volume-weighted average price of Clearday’s common stock over the ten (10) consecutive trading days that are not subject to specified market disruptions immediately preceding the date of the conversion. The conversion right of the 1800 Noteholder is subject to a customary limitation on beneficial ownership of 4.99% of Clearday’s common stock. Jefferson Street – February 2023 On February 17, 2023, the Company issued an unsecured promissory note (the “Jefferson Street Note”) to an institutional lender. the Company used the net proceeds of this financing to fund the Company’s operations. On February 17, 2023, the Company entered into a Securities Purchase Agreement with an institutional lender (the “Lender”) to issue an unsecured promissory note (the “Jefferson Street Note”) to the Lender. This Jefferson Street Note provides for the proceeds to us of approximately $ 135,000 22,217 12 172,217 15,000 a one-time interest charge of 12 20,666 a one-year maturity shall be paid in ten (10) payments 19,288.30 192,883 , which payments are subject to a 10 day grace period, or shorter if the payment date is not a business day. The Jefferson Street Note provides specified events of default (a “Event of Default”) including failure to timely pay the monetary obligations under the Jefferson Street Note and such breach continues for a period of ten (10) days after written notice from the Jefferson Street Noteholder’ a breach of covenants under the Jefferson Street Note or the Securities Purchase Agreement that continues for a period of twenty (20) days after written notice by the Jefferson Street Noteholder; breach of any representation and warranty in the Jefferson Street Note or Securities Purchase Agreement; commencement of bankruptcy or similar proceedings; failure to maintain the listing of Clearday’s common stock on at least one of the Over-the-Counter markets such as the OTCQX; the failure of Clearday to comply with the reporting requirements of the Securities Exchange Act; Clearday’s liquidation, or a financial statement restatement by Clearday. Upon any Event of Default, the obligations under the Jefferson Street Note will accrue interest at an annual rate of 22% and, if such Event of Default is continuing at any time that is 180 days after the date of the Jefferson Street Note, provide the Jefferson Street Noteholder the right and option to convert the obligations under the Jefferson Street Note to shares of Clearday’s common stock. The price for any such conversion is equal to 75% (or a 25% discount) of the average of the five (5) lowest per share daily volume-weighted average price of Clearday’s common stock over the ten (10) consecutive trading days that are not subject to specified market disruptions immediately preceding the date of the conversion. The conversion right of the holder of the Jefferson Street Note is subject to a customary limitation on beneficial ownership of 4.99% of Clearday’s common stock. Each of the Jefferson Street Note and the Securities Purchase Agreement has other customary covenants and provisions, including representations and warranties, payment of brokers, and indemnification, that Clearday will not sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business without the consent of the holder of the Jefferson Street Note and Clearday will maintain a reserve of authorized and unissued shares of common stock sufficient for full conversion of the obligations under the Jefferson Street Note. As additional consideration, the Company issued to the Lender a Common Stock Purchase Jefferson Street Warrant (“Jefferson Street Warrant”) to purchase 225,000 0.75 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Convertible Notes Issued by AIU Alternative Care, Inc. From February 17, 2023 to April 10, 2023, a subsidiary of the Company, AIU Alternative Care, Inc. (“AIU Alt Care”), issued convertible unsecured promissory notes (each, a “Convertible Note” and collectively, the “Convertible Notes”) to lenders in a private placement of such securities, including related persons. The aggregate gross proceeds of such Convertible Notes to March 31, 2023 are approximately 279,000 549,000 12 1 10 0.75 0.75 ● The issuance by AIU Alt Care or the Company or any of its other subsidiaries of any equity securities in one or more offerings with aggregate gross proceeds of at least $ 5 ● The issuance by the Company or any of its other subsidiaries of convertible debt securities that were issued with gross proceeds in an aggregate amount of at least $ 5 ● The listing by the Company or its common stock to the New York Stock Exchange, the NYSE American or any tier of the NASDAQ market in connection with an offering of securities by the Company or any of its subsidiaries in connection with any merger, consolidation or similar transaction with another person in which the Company is the surviving entity; or ● The exchange of the shares of the Company’s common stock for the common stock or other security that is listed on the New York Stock Exchange, the NYSE American or any tier of the NASDAQ market in connection with any merger, consolidation or similar transaction with another person in which Clearday is not the surviving entity or in which Clearday becomes a subsidiary of such other person, including without limitation, any special purpose acquisition corporation. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Contingencies The tenant, MCA Simpsonville Operating Company LLC, referred to as Tenant, of the MCA community that is located in Simpsonville, South Carolina, referred to as the Simpsonville Facility, and other affiliates of the Company have a dispute with the landlord of the Simpsonville Facility, MC-Simpsonville, SC-UT, LLC, referred to as the Landlord, and its affiliates (Embree Group of Companies: Embree Construction Group, Inc., Embree Asset Group, Inc., and Embree Capital Markets Group, Inc., referred to collectively as Embree) under the terms of the lease. After non-payment, the Landlord instituted litigation (“Simpsonville Action 1”) that is captioned and numbered MC-Simpsonville, SC-UT, LLC v. Steve Person, et. al., Cause No. 19-0651-C368 in the 368th Judicial District Court of Williamson County, Texas. After the trial court issued a judgment on damages in the amount of $ 2,801,365 3,012,011 2,763,936 248,075 The Landlord filed a second action on April 9, 2021 (Simpsonville Action 2), for claims similar to Simpsonville Action 1 including relief for payment of rent past due and reimbursement of taxes from October 2020 to the time of the trial in this action. This action captioned and numbered MC-Simpsonville, SC-UT, LLC v. Steve Person, James Walesa and Trident Healthcare Properties I, LP (“Trident”), Cause No. 21-0513-C425 in the 425th Judicial District Court of Williamson County, Texas. The court granted summary judgment in this matter in favor of the Landlord on April 14, 2023. On September 14, 2023 the court entered an order (the “Judgment Enforcement Order”) requiring the turnover of non-exempt assets of the defendants Steve Person and James Walesa and the assets of Trident Healthcare Properties I, LP and the appointment of a receiver to enforce the summary judgement. The Judgment Enforcement Order provides, in part, that “Nothing in this Order is intended to delay, hinder or disrupt the closing of the [Viveon] merger.” The Judgment Enforcement Order also provides certain restrictions regarding the sale or transfer of the Clearday securities owned by Steve Person or James Walesa, providing in part that “Any liquidation of the Clearday shares by Receiver requires approval of this Court, after notice and hearing, or written agreement of the parties. Nothing herein, however, prevents the transfer of the shares under the expected merger so long as Defendant and the receivership estate retain their rights in such shares. No party, including Defendants, shall encumber the shares except as specifically provided herein.” Under the structure used for the lease and operations of the Simpsonville Facility, a subsidiary of Clearday, Inc., Tenant, is the direct obligor under the lease and another subsidiary of Clearday, Trident, is a guarantor of the lease obligations. Neither Tenant or Trident have any material assets. We are assessing the exposure of these matters to Clearday, Inc. under these actions, including any liability under indemnification agreements with the individual guarantors. We expect to offer to negotiate a settlement of the summary judgement. There can be no assurance that any such settlement discussions will be held or that there will be any settlement of these actions on terms that are acceptable or at all. Certain subsidiaries of the Company that operate hotel assets did not pay employment related taxes such as required withholdings for Texas State unemployment taxes and federal income tax and employee and employer contributions for FICA (Social Security and Medicare) taxes, and federal unemployment tax for certain periods from December 31, 2018, to December 31, 2021. These subsidiaries have since made the appropriate filings with the Internal Revenue Service and the Company has accrued the full estimated amount of the underpaid taxes as well as the estimated penalties and interest. As of December 31, 2022, the amount of the estimated taxes, penalties, and interest, assuming that there is no waiver or mitigation of the penalties, is $ 311,000 261,000 In the fourth quarter of 2021, certain subsidiaries of the Company did not remit payroll taxes related to the Earned Retentions Tax Credit (“ERTC”). The ERTC program permitted an offset for such obligations and was terminated during the fourth quarter with an effective termination date of September 30, 2021. As a result, the Company has accrued $ 1,097,000 Certain subsidiaries of the Company that operate its residential care communities have not paid employment related taxes such as required withholdings for federal income tax and employee and employer contributions for FICA (Social Security and Medicare) taxes, and federal and state unemployment tax from and after the payroll period that ended September 16, 2022. These subsidiaries have since made the appropriate filings with the Internal Revenue Service and the Company has accrued the amount of the underpayment in its financial statements as of March 31, 2023 and December 31, 2022, of approximately $ 978,000 527,000 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Certain subsidiaries of the Company that operate residential care facilities (“MCA Borrowers”) incurred certain financings through merchant credit advances. Such financings were provided by creditors under agreements (“MCA Agreements”) that describe the transaction as the sale of future receivables by the applicable MCA Borrower. The aggregate accrued amount of these financings is approximately $ 2,925,195 1,531,640 These actions are: 1. Premium Merchant Funding 18, LLC v Memory Care at Good Shepherd LLC and James Walesa (a guarantor), filed in state court in Kings County, New York on August 19, 2022 (summary judgement in this matter was entered in favor of the plaintiff and the Company has entered a notice to appeal); 2. Libertas Funding LLC v. Memory Care at Good Shepherd, LLC, et. al. including James Walesa (a guarantor), filed in state court in Monroe County, New York on August 24, 2022 (summary judgement in this matter was entered in favor of the Company’s subsidiary and may be appealed by the plaintiff); 3. Cloudfund LLC v MCA New Braunfels Operating Company LLC et. al. including James Walesa (a guarantor), filed in state court in Nassau County, New York on August 29, 2022; 4. Cloudfund LLC v MCA Naples Operating Company, LLC and James Walesa (a guarantor), filed in state court in Nassau County, New York on August 30, 2022 (summary judgement in this matter was entered in favor of the plaintiff and the Company has have entered a notice to appeal); 5. Swift Funding Source Inc. v MCA Naples Operating Company LLC et. al. including Christin Hemmens (a guarantor), filed in state court in Ontario County, New York on August 31, 2022; 6. Pirs Capital, LLC v MCA Westover Hills Operating Company, LLC et. al. including James Walesa (a guarantor), filed in state court in New York County, New York on September 8, 2022; 7. Prosperum Capital Partners, LLC dba Arsenal Funding v MCA Westover Hills Operating Company LLC et. al. including James Walesa (a guarantor), filed in state court in Kings County, New York on September 28, 2022; 8. Fox Capital Group, Inc. v MCA Westover Hills Operating Company LLC et. al. including James Walesa (a guarantor), filed in state court in Bexar County, Texas on October 25, 2022. James Walesa is the Company’s Chief Executive Officer, and/or Christin Hemmens, is an officer of Clearday. Other than as set forth above, each of these actions are in the pleading or discovery stage of litigation. Naples Equity Loan: The mortgage lender for the Naples, Florida facility commenced an action for nonpayment of the mortgage note. The action is captioned A.AD.A, INC.; Anga Properties, LLC; Arce Holdings, LLC; Benfam Holdings LLC; Carolina Resources, LLC; Emilio Diaz SD Investment Account, LLC; Michael B. and Irma B. Goldstein; David J. Gonzalez; Hersab Holdings, LLC; Indocan Investment USA Corporation; Armando Navarro; Robbia Properties LLC; Shochat Holdings I LLC; and Wekwit, Inc. (collectively referred to as the Naples Lender) vs. MCA Naples, LLC (“MCA Naples”), Case No. 11-2023-CA-000243-0001- flied in the Circuit Court in and for Collier County, Florida (the “Benworth Action”). This litigation arises from the nonpayment under the mortgage and promissory note. The Benworth Action demands payment of the principal amount of the promissory note of $4,550,000 together with default interest, late charges, costs advanced, insurance advances, attorney’s fees and costs and seeks the Final Judgment of Foreclosure and such further relief as the court deems just and proper. The Benworth Action also seeks the amount from James Walesa, the Company’s Chief Executive Officer, under the personal irrevocable and unconditional guaranty, in favor of Benworth Capital Partners, LLC, of the obligations of MCA Naples under the mortgage and promissory note. A clerk’s default was entered against MCA Naples on May 15, 2023 and against Mr. Walesa on May 31, 2023. On July 5, 2023, MCA Naples filed a motion to set aside the default and the defaults were set aside. MCA Naples, LLC filed its Answer and Defenses. A Motion to Dismiss the Complaint was filed on behalf of Mr. Walesa and is set for hearing on November 6, 2023. Plaintiffs filed a Motion for Summary Judgment which was denied on October 3, 2023. We believe that the fair value of the mortgaged property has a fair value that is significantly greater than the amount mortgage obligations and intends to negotiate a forbearance or other modification of the mortgage or refinance the mortgage obligations or assist in a sale and modification of the mortgage note. There can be no assurance, however, that any such transaction will be consummated on acceptable terms or at all. Leander Stearns National Association, the mortgage lender for the property (“Leander Property”) owned by Leander Associates, Ltd., (“Leander”), a Texas limited partnership that is a consolidated subsidiary of Clearday, Inc., has commenced litigation regarding the nonpayment of a mortgage loan obligations of approximately $875,000 seeking repayment of the mortgage loan of $805,000 that was due February 10, 2023 and additional amounts, including interest and late fees. Leander and the mortgage lender entered into a Forbearance Agreement as of May 22, 2023 and the first amendment thereto dated September 8, 2023, that, among other matters, provided a forbearance period and extended the maturity of the mortgage loan to October 21, 2023, and requires certain payments to the mortgage lender, including monthly installment payments to the mortgage lender of all accrued, unpaid interest starting on September 15, 2023 and continuing on the same day of each month thereafter until the New Maturity Date (as defined below) with interest calculated on the unpaid principal balance as set forth in the Note. The mortgage loan under the forbearance agreement, as amended, provides that the mortgage lender deferred certain past-due interest to the extended maturity date of October 21, 2023. Leander has entered into a purchase and sale agreement for the Leander Property for a value that is in excess of the amounts owed to the mortgage lender and the other financing by us owed to KOBO LP with respect to the Leander Property. We believe that the net proceeds to Leander from the sale of the Leander Property will not be material after giving effect to the payments to the mortgage lender, and existing financing of net proceeds to KOBO LP and other financings of such proceeds, and transaction brokerage fees and other costs. The Company has been threatened with litigation by the law firm Rigrodsky Law, P.A. alleging unjust enrichment in connection with stockholder litigation commenced by such firm related to the AIU Merger and claiming damages of $ 200,000 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Certain subsidiaries of the Company that operate hotel assets have not paid employment related taxes such as required withholdings for Texas State unemployment taxes and federal income tax and employee and employer contributions for FICA (Social Security and Medicare) taxes, and federal unemployment tax for the period from December 31, 2018, to December 31, 2019. These subsidiaries have since made the appropriate filings with the Internal Revenue Service and the Company has accrued the full estimated amount of the underpaid taxes as well as the estimated penalties and interest. As of March 31, 2023, the amount of the estimated taxes, penalties, and interest, assuming that there is no waiver or mitigation of the penalties, is $ 467,451 In addition, from time to time, the Company becomes involved in litigation matters in the ordinary course of its business. Such litigations include an action that alleges negligence and other claims regarding the death of a resident in a memory care facility. Although the Company is unable to predict with certainty the eventual outcome of any litigation, the Company does not believe any of its currently pending litigation is likely to have a material adverse effect on its business. Indemnification Agreements Certain lease and other obligations of the Company are guaranteed in whole or in part by James Walesa and/or BJ Parrish and others. The Company has agreed to indemnify and hold each such individual harmless for all liabilities and payments on account of any such guaranty. The lease obligations of the Company for its lease obligations for four of its five MCA facilities, including the lease of the MCA community that is in Simpsonville, South Carolina, referred to as the Simpsonville facility. This is the facility that is the subject of litigation and judgement against certain of the Company’s subsidiaries. We have been fully indemnified by James Walesa for all obligations that the Company may incur with respect to an adverse judgement against the Company, including any post-judgement interest. Such indemnification by James Walesa is under an agreement dated as of July 30, 2020. Under such agreement, James Walesa receives a fee equal to 2 10.00 10.00 Subsequently, an amendment to the indemnification agreement above was signed on January 19, 2021, in which additional securities were pledged on behalf of James Walesa for all obligations that Company may incur with respect to an adverse judgement and/or any post-judgement interest. In the event that Mr. Walesa is required to make any payments under this amended indemnification agreement, then Company will issue shares of AIU Care, AIU Warrants and AIU Common Stock at $ 10.00 20.00 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 9. Earnings Per Share Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average number of common shares and potentially dilutive securities outstanding for the period. For the Company’s diluted earnings per share calculation, the Company uses the “if-converted” method for preferred stock and convertible debt and the “treasury stock” method for Warrants and Options. The following tables set forth the potentially dilutive shares that were anti-dilutive in their respective periods as the Company had net losses for the periods ended March 31, 2023 and 2022, respectively. Schedule of Anti-Dilutive Shares Compensation of Earnings (Loss) Per Share 2023 2022 For the Three Months Ended Dilution shares calculation March 31, 2023 2022 Series A Convertible Preferred Stock 328,925 328,925 Series F 6.75% Convertible Preferred Stock 4,791,401 4,797,052 Series I 10.25% Convertible Preferred Stock 682,820 320,657 Limited Partnership Units 99,038 99,038 Warrants 7,618,820 4,038,801 Total participating securities 13,521,004 9,586,495 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions Debt. There are some loans in which executive management has loaned money to the Company. In addition, there are loans made by the Company itself in which certain executives personally guarantee the debt. Cibolo Creek Partners, LLC (“Cibolo Creek”) and its affiliate Round Rock Development Partners, LP (“RRDP”) prior to December 31, 2018, made loans to us under revolving credit notes that bear interest at then applicable federal rate and are payable on demand or other date that was specified by such lender. In December 2018, AIU acquired businesses affiliated with Cibolo Creek. As of December 31, 2022, AIU, Inc., Cibolo Creek and Round Rock were owed $ 66,208 411,470 500,000 We owe (1) Richard Morris, our General Counsel, $ 330,175 94,650 44,165 130,000 44,000 Guarantees From time-to-time certain officers and directors will personally guarantee a loan. There is a guaranteed fee agreement in place that details the amount of the fee as well as payment terms for certain executives in the Company. The amount of the fee is capped at 1 |
Deficit
Deficit | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Deficit | 11. Deficit The certificate of incorporation of Clearday, Inc. provides for 80,000,000 10,000,000 0.001 On January 27, 2023, the Company issued 4,218,158 3,248,000 Liquidation Preference In the event of the Company’s liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all the Company’s debts and other liabilities and the satisfaction of any liquidation preferences that may be granted to the holders of any then outstanding shares of preferred stock. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Rights and Preferences Holders of common stock have no preemptive, conversion or subscription rights, and there is no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock, which the Company may designate and issue in the future. Voting Rights Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors Subject to supermajority votes for some matters, matters shall be decided by the affirmative vote of the Company’s stockholders having a majority in voting power of the votes cast by the stockholders present or represented and voting on such matter, provided that the holders of the Company’s common stock are not allowed to vote on any amendment to the Company’s certificate of incorporation that relates solely to the terms of one or more series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders or one or more such series, to approve such amendment. The affirmative vote of the holders of at least 75% of the votes that all of the Company’s stockholders would be entitled to cast in any annual election of directors and, in some cases, the affirmative vote of a majority of minority stockholders entitled to vote in any annual election of directors are required to amend or repeal the Company’s bylaws, amend or repeal certain provisions of the Company’s certificate of incorporation, approve certain transactions with certain affiliates, or approve the sale or liquidation of the Company. The vote of most minority stockholders applies when an individual or entity and its affiliates or associates together own more than 50% of the voting power of the Company’s then outstanding capital stock Preferred Stock The Company has 5,000,000 6.75 0.001 4,791,401 4,797,052 20.00 2.38 The Company’s Series A Preferred Stock has a $ .001 2,000,000 328,925 0.01 Dividends and Distributions For the periods ended March 31, 2023, and 2022, the Company accrued dividends for the 6.75 1,698,784 1,619,015 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Warrants The Company has three separate types of warrants that are outstanding: ● warrants that were granted and outstanding by Superconductor Technologies Inc. (“STI”) prior to the September 9, 2021 effective date of the previously disclosed merger (the “AIU Merger”) with Allied Integral United, Inc. (“AIU”); ● warrants assumed by the Company that were granted by AIU prior to the effective date of the AIU Merger; and ● warrant that were issued by the Company after the AIU Merger. The following is a summary of such outstanding warrants at March 31 2023: Warrants (“STI Warrants”) issued by STI prior to September 9, 2021, the effective date of the AIU Merger. Summary of Outstanding Warrants Total Currently Exercisable Exercise Price per Share Expiration Date Common Shares Total Currently Exercisable Exercise Price per Share Expiration Date Warrants related to March 2018 financing 7,331 7,331 $ 245.84 September 9, 2023 Warrants related to July 2018 financing 119,241 119,241 $ 75.48 July 25, 2023 Warrants related to July 2018 financing 7,154 7,154 $ 94.35 July 25, 2023 Warrants related to May 2019 financing 5,518 5,518 $ 26.96 May 23, 2024 Warrants related to October 2019 financing 100,719 100,719 $ 5.39 October 10, 2024 Warrants related to October 2019 financing 14,336 14,336 $ 6.74 October 8, 2024 Warrants that were issued by Clearday Operations, Inc. prior to the effective date of the AIU Merger Common Shares Total Currently Exercisable Exercise Price per Share Expiration Date Warrants issued in connection with financings * 3,281,508 3,281,508 $ 5.00 November 15, 2029 Warrants issued to a consultant ^ 500,000 500,000 $ 11.00 August 10, 2026 * Two of our subsidiaries have preferred securities that are classified under GAAP as Non-Controlling Interest: (1) the preferred stock designated as the Series I 10.25% cumulative convertible preferred stock, par value $0.01 per share of AIU Alt Care (the “Alt Care Preferred Stock”); and (2) the preferred limited partnership interests of Clearday OZ Fund (the “Clearday OZ LP Interests”) As of March 31, 2023, there are 1,376,118 3,281,508 5.00 ^ The Company also has a warrant issued to a consultant representing 500,000 11.00 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Warrants issued by Clearday, Inc. after the effective date of the AIU Merger Each of the following warrants were issued in connection with a financing and provides that the warrant may only be issued upon an event of default under the related promissory note. Common Shares Outstanding Exercisable Exercise Price Maturity Date Related to the January 12, 2023, Financing (Mast Hill LP) 1,134,000 0 $ 0.75 5 years after Trigger Date Related to the September 30, 2022, Financing (Mast Hill LP) 472,500 0 $ 0.50 5 years after Trigger Date Related to the July 1, 2022, Financing (Mast Hill LP) 900,000 0 $ 0.50 5 years after Trigger Date * Trigger Date is defined as the date of an Event of Default under the promissory note that is related to the financing in which this warrant was issued, which default has not been waived. The additional warrants were also issued to lenders: Common Shares Related to the February 17, 2023, Financing (Jefferson Street Capital LLC) 225,000 225,000 $ 0.75 March 16, 2028 Related to the January 12, 2023, Financing (Mast Hill LP) 851,000 851,000 $ 0.75 February 14, 2028 Derivative Calculation At March 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $ 0.51 3.60% 4.94% 182% 421% 0.35 0.43 Stock Options On March 31, 2023, we continued to have the two active equity award option plans, the 2003 Equity Incentive Plan and the 2013 Equity Incentive Plan (collectively, the “Stock Option Plan”). Although we can only grant new options under the 2013 Equity Incentive Plan. Under our Stock Option Plan, stock awards were made to our former directors, key employees, consultants, and non-employee directors and consisted of stock options, restricted stock awards, performance awards, and performance share awards. Stock options were granted at prices no less than the market value on the date of grant. There were no stock option exercises during the three and twelve months ended March 31, 2023 or December 31, 2022. There were no stock options that were exercisable on March 31, 2023. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Restricted Stock During the first quarter of 2023, we issued approximately 4,326,415 4,218,158 3,248,000 25,097 Registered Shares During the first quarter of 2023, we issued approximately 48,802 As of March 31, 2023, there was no unamortized stock compensation. Non-Controlling Interest In November 2019, a certificate of incorporation was entered into by AIU Alt Care for Series I 10.25 0.01 1,500,000 1,500,000 700,000 In October 2019, AIU Alt Care formed AIU Impact Management, LLC and they formed Clearday OZ Fund, which is managed by AIU Impact Management, LLC, as the general partner. For the three months ended March 31, 2023 and 2022, $ 0 0 The exchange rate for each of the Alt Care Preferred Stock and the limited partnership units in Clearday OZ Fund to Clearday, Inc. Common Stock is equal to (i) the aggregate investment amount for such security plus accrued dividends at 10.25% per annum, (ii) divided by 80% of the 20 consecutive day volume weighted closing price of the Common Stock of Clearday preceding the conversion date. Prior to the merger, these securities were exchangeable to shares of AIU common stock at a rate of 1 share for every $10.00 of aggregate amount of the investment plus such accrued dividends. Non-Controlling Interest Loss Allocation The Company applied ASC 810-10 guidance to correctly allocate the percentage of loss attributable to the NCI of each company. For the period ended March 31, 2023, the loss for AIU Alt Care is $ 16,190 540,330 99 16,028 534,927 3,252 145,772 Cumulative Convertible Preferred Stock and Limited Partnership Interests in Subsidiaries (NCI) For the period ended March 31, 2023 no additional shares of AIU Alt Care Preferred Stock or Clearday OZ LP Interests were issued. At March 31, 2023, 89,700 244,473 The terms and conditions of the Alt Care Preferred Stock and the Clearday OZ LP Interests allow the investors in such interests to exchange such securities into the Company’s common stock at the conversion price equal to 80 2,010,150 Each warrant has a term of ten years 1 5.00 Dividends on the Alt Care Preferred Stock and preferred distributions on the units of limited partnership interests in Clearday OZ Fund are at each calendar quarterly month end at the applicable dividend rate ( 10.25 682,820 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Each of the Company, AIU Alt Care and Clearday OZ Fund shall redeem the Alt Care Preferred Stock or the units of limited partnership interests on the 10 Year Redemption Date that is ten years after the final closing of the offering. The securities provide for a redemption in cash or shares of common stock at the option of Clearday, Inc., in an amount equal to the unreturned investment in the Alt Care Preferred Stock or units of limited partnership interests. Upon consummation of certain equity offerings prior to May 1, 2022, AIU Alt Care may, at its option, redeem all or a part of the Alt Care Preferred Stock for the liquidation preference plus a make-whole premium. In addition, upon the occurrence of, among other things (i) any change of control, (ii) a liquidation, dissolution, or winding up, (iii) certain insolvency events, or (iv) certain asset sales, each holder may require the Company to redeem for cash all such holder’s then outstanding shares of Alt Care Preferred Stock. The Certificate of Designation also sets forth certain limitations on the Company’s ability to declare or make certain dividends and distributions and engage in certain reorganizations. The limited partnership agreement has similar provisions. Subject to certain exceptions, the holders of Alt Care Preferred Stock and the units of limited partnership interests have no voting power and no right to vote on any matter at any time, either as a separate series or class or together with any other series or class of shares of capital stock or partnership interests, and are not be entitled to call a meeting of such holders for any purpose, nor are they entitled to participate in any meeting of the holders of the Company’s common stock or participate in the management of Clearday OZ Fund by its general partner. |
Mezzanine Equity
Mezzanine Equity | 3 Months Ended |
Mar. 31, 2023 | |
Mezzanine Equity | |
Mezzanine Equity | 12. Mezzanine Equity The Company has 10,000,000 0.001 5,000,000 4,791,401 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events We evaluated subsequent events and transactions occurring after March 31, 2023, through the date of this Report. Viveon Merger Merger Agreement On April 5, 2023, the Company entered into a Merger Agreement (the “Merger Agreement”), by and among the Company, Viveon Health Acquisition Corp., a Delaware corporation (“Viveon” or “Viveon Health”), VHAC2 Merger Sub, Inc., a Delaware corporation (“Merger Sub”), Viveon Health LLC, a Delaware limited liability Company, in the capacity as the representative from and after the Effective Time (as defined in the Merger Agreement) for the stockholders of Viveon (other than the Company Stockholders (as defined in the Merger Agreement)) as of immediately prior to the Effective Time (and their successors and assigns) in accordance with the terms and conditions of the Merger Agreement, and the Company SR LLC, a Delaware limited liability company, in the capacity as the representative from and after the Effective Time for the holders of Company Preferred Stock (as defined in the Merger Agreement) as of immediately prior to the Effective Time (and their successors and assigns) in accordance with the terms and conditions of the Merger Agreement. Pursuant to the terms of the Merger Agreement, a business combination between Viveon and the Company will be effected through the Viveon Merger of Merger Sub with and into the Company, with the Company surviving the Viveon Merger as a wholly owned subsidiary of Viveon and Viveon will change its name to “Clearday Holdings, Inc.” (the “Merger”). The board of directors of the Company has (i) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement, the Merger and related transactions by the stockholders of the Company. Capitalized terms used herein but not defined shall have the meanings ascribed thereto in the Merger Agreement, which is attached hereto as Exhibit 2.1. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Merger Consideration The total consideration to be paid at Closing (the “Merger Consideration”) by Viveon to the Company security holders (and holders who have the right to acquire the Company capital stock) will be an amount equal to $ 250 0.0001 10 In addition, the holders of Company Preferred Stock will have the contingent right to earn up to 5,000,000 If, following the Closing Date and prior to end of the Earnout Eligibility Period, there is a Change of Control, then, immediately prior to such Change of Control, all the Earnout Shares not yet earned shall be earned by the Company Earnout Holders and shall be released from escrow and delivered to the Company Earnout Holders, and the Company Earnout Holders shall be eligible to participate in such Change of Control transaction with respect to such Earnout Shares. The Earnout Shares will be placed in escrow and will not be released from escrow until they are earned as a result of the occurrence of the Earnout Milestone or a Change of Control, if applicable. The Earnout Shares that are not earned on or before the expiration of the Earnout Eligibility Period shall be automatically forfeited and cancelled. Cancellation of Securities. Each share of the Company capital stock, if any, that is owned by Viveon, Merger Sub, the Company, or any of their subsidiaries (as treasury stock or otherwise) immediately prior to the effective time of the Merger (the “Effective Time”), will automatically be cancelled and retired without any conversion or consideration. Preferred Stock. At the Effective Time, each issued and outstanding share of the Company’s Series F Cumulative Convertible Preferred Stock, par value $ 0.001 Each issued and outstanding share of the Company’s Series A Convertible Preferred Stock, par value $ 0.001 Common Stock. At the Effective Time, each issued and outstanding share of the Company’s common stock, par value $ 0.001 (i) the sum of $ 250 10.00 Stock Options. At the Effective Time, each outstanding option to purchase shares of the Company Common Stock will be converted into an option to purchase, subject to substantially the same terms and conditions as were applicable under such options prior to the Effective Time, shares of Viveon Common Stock equal to the number of shares subject to such option prior to the Effective Time multiplied by the Conversion Ratio, at an exercise price per share of Viveon Common Stock equal to the exercise price per share of the Company Common Stock subject to such option divided by the Conversion Ratio. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Warrants. Contingent on and effective as of immediately prior to the Effective Time, each outstanding warrant to purchase shares of the Company Preferred Stock or the Company Common Stock will be treated in accordance with the terms thereof. Convertible Notes. Contingent on and effective as of immediately prior to the Effective Time, the Company’s convertible notes outstanding as of immediately prior to the Effective Time, will be treated in accordance with the terms of the relevant agreements governing such convertible notes. Subsidiary Capital Stock. At and as of the Effective Time, the Alt Care Preferred Stock and the Clearday OZ LP Interests (collectively, the “Subsidiary Capital Stock”) will remain in full force and effect with the right to acquire the Viveon Common Stock with such adjustments noted in the terms of such Subsidiary Capital Stock. Representations and Warranties The Merger Agreement contains customary representations and warranties of the parties thereto with respect to, among other things, (a) corporate existence and power, (b) authorization to enter into the Merger Agreement and related transactions; subsidiaries, (c) governmental authorization, (d) non-contravention, (e) capitalization, (f) corporate records, (g) consents, (h) financial statements, (i) internal accounting controls, (j) absence of certain changes, (k) properties; title to assets, (l) litigation, (m) material contracts, (n) licenses and permits, (o) compliance with laws, (p) intellectual property, (q) privacy and data security, (r) employee matters and benefits, (s) tax matters, (t) real property, (u) environmental laws, (v) finders’ fees, (w) directors and officers, (x) anti-money laundering laws, (y) insurance, (z) related party transactions, and (aa) certain representations related to securities law and activity. Viveon has additional representations and warranties, including (a) issuance of shares, (b) trust fund, (c) listing, (d) board approval, (e) SEC documents and financial statements, (f) certain business practices, (g) expenses, indebtedness and other liabilities and (h) brokers and other advisors. Covenants The Merger Agreement includes customary covenants of the parties with respect to operation of their respective businesses prior to consummation of the Merger and efforts to satisfy conditions to consummation of the Merger. The Merger Agreement also contains additional covenants of the parties, including, among others, access to information, cooperation in the preparation of the Registration Statement and Proxy Statement (as each such terms are defined in the Merger Agreement) required to be filed in connection with the Merger and to obtain all requisite approvals of each party’s respective stockholders. Viveon and the Company have each also agreed to include in the Proxy Statement the recommendation of its respective board that its stockholders approve all of the proposals to be presented at its respective special meeting. In addition, each of Viveon and the Company have agreed to use commercially reasonable efforts to solicit and finalize definitive documentation for a committed equity in an aggregate amount that, together with the funds in the Trust Account after giving effect to potential redemptions from Viveon’s public stockholders, together with financing programs available to the Company after the Closing, will provide to the Company working capital to meet its short term commercial development goals. Viveon has also agreed to prepare a proxy statement to seek the approval of its stockholders (the “Extension Proposal”) to amend its organizational documents to extend the period of time Viveon is afforded under its organizational documents and IPO prospectus to consummate an initial business combination for an additional three months, from June 30,2023 to September 30, 2023 (or such earlier date as Viveon and the Company may agree in writing). Each party’s representations, warranties and pre-Closing covenants will not survive Closing and no party has any post-Closing indemnification obligations. Viveon Equity Incentive Plan, Viveon has agreed to approve and adopt an equity incentive plan (the “Incentive Plan”) to be effective as of the Closing and in a form mutually acceptable to Viveon and the Company, subject to approval of the Incentive Plan by the Viveon stockholders. The Incentive Plan will provide for an initial aggregate share reserve equal to 8 Non-Solicitation Restrictions Each of Viveon and the Company has agreed that from the date of the Merger Agreement to the Effective Time or, if earlier, the valid termination of the Merger Agreement in accordance with its terms, it will not initiate any negotiations with any party relating to an Alternative Transaction (as such term is defined in the Merger Agreement) or enter into any agreement relating to such a proposal, other than as expressly excluded from the definition of an Alternative Transaction. Each of Viveon and the Company has also agreed to be responsible for any acts or omissions of any of its respective representatives that, if they were the acts or omissions of Viveon and the Company, as applicable, would be deemed a breach of the party’s obligations with respect to these non-solicitation restrictions. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Conditions to Closing The consummation of the Merger is conditioned upon, among other things, (i) the absence of any applicable law or order restraining, prohibiting or imposing any condition on the consummation of the Merger and related transactions, (ii) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (iii) receipt of any consent, approval or authorization required by any Authority (as defined in the Merger Agreement), (iv) Viveon having net tangible assets of at least $ 5,000,001 Solely with respect to Viveon and Merger Sub, the consummation of the Merger is conditioned upon, among other things, (i) the Company having duly performed or complied with all of its obligations under the Merger Agreement in all material respects, (ii) the representations and warranties of the Company, other than certain fundamental representations as defined in the Merger Agreement, being true and correct in all respects unless failure would not have or reasonably be expected to have a Material Adverse Effect (as defined in the Merger Agreement) on the Company or any of its subsidiaries, (iii) certain fundamental representations, as defined in the Merger Agreement, being true and correct in all respects, other than de minimis inaccuracies, (iv) no event having occurred that would result in a Material Adverse Effect on the Company or any of its subsidiaries, (v) the Company and its securityholders having executed and delivered to Viveon each Additional Agreement (as defined in the Merger Agreement) to which they each are a party and (vi) the Company delivering certain certificates to Viveon. Solely with respect to the Company, the consummation of the Merger is conditioned upon, among other things, (i) Viveon and Merger Sub having duly performed or complied with all of their respective obligations under the Merger Agreement in all material respects, (ii) the representations and warranties of Viveon and Merger Sub, other than certain fundamental representations as defined in the Merger Agreement, being true and correct in all respects unless failure to be true and correct would not have or reasonably be expected to have a Material Adverse Effect on Viveon or Merger Sub and their ability to consummate the Merger and related transactions, (iii) certain fundamental representations, as defined in the Merger Agreement, being true and correct in all respects, other than de minimis inaccuracies, (iv) no event having occurred that would result in a Material Adverse Effect on Viveon or Merger Sub, (v) the Amended Parent Charter (as defined in the Merger Agreement) being filed with, and declared effective by, the Delaware Secretary of State, (vi) Viveon delivering certain certificates to the Company, (vii) the size and composition of the post-Closing board of directors of Viveon having been appointed as set forth in the Merger Agreement and (viii) Viveon, Viveon Health LLC (“Sponsor”) and other stockholders, as applicable, having executed and delivered to the Company each Additional Agreement to which they each are a party. Termination The Merger Agreement may be terminated at any time prior to the Effective Time as follows: (i) by either Viveon or the Company, if (A) the Merger and related transactions are not consummated on or before the latest of (1) June 30, 2023, (2) if the Extension Proposal is approved, September 30, 2023 and (3) if one or more extensions to a date following September 30, 2023 are obtained at the election of Viveon, with Viveon stockholder vote, in accordance with the Viveon’s amended and restated certificate of incorporation, the last date for Viveon to consummate a business combination pursuant to such extensions; and (B) the material breach or violation of any representation, warranty, covenant or obligation under the Merger Agreement by the party seeking to terminate the Merger Agreement was not the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Closing Date, without liability to the other party; (ii) by either Viveon or the Company, if any Authority has issued any final decree, order, judgment, award, injunction, rule or consent or enacted any law, having the effect of permanently enjoining or prohibiting the consummation of the Merger, provided that, the party seeking to terminate cannot have breached its obligations under the Merger Agreement and such breach was a substantial cause of, or substantially resulted in, such action by the Authority; and (iii) by mutual written consent of Viveon and the Company duly authorized by each of their respective boards of directors. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Certain Related Agreements Parent Support Agreements. Concurrently with the execution of the Merger Agreement, Viveon, the Company and the Sponsor and the officers and directors of Viveon entered into a support agreement (the “Parent Support Agreement”) pursuant to which the Sponsor and the officers and directors of Viveon have agreed to vote all shares of Viveon common stock beneficially owned by them, including any additional shares of Viveon they acquire ownership of or the power to vote: (i) in favor of the Merger and related transactions, (ii) against any action reasonably be expected to impede, delay, or materially and adversely affect the Merger and related transactions, and (iii) in favor of an extension of the period of time Viveon is afforded to consummate an initial business combination. Company Support Agreements. Concurrently with the execution of the Merger Agreement, Viveon, the Company and certain stockholders of the Company entered into a support agreement (the “Company Support Agreement”), pursuant to which such the Company stockholders have agreed to vote all common and preferred stock of the Company beneficially owned by them, including any additional shares of the Company they acquire ownership of or the power to vote, in favor of the Merger and related transactions and against any action reasonably be expected to impede, delay, or materially and adversely affect the Merger and related transactions. Lock-Up Agreements. In connection with the Closing, certain the Company stockholders will each agree, subject to certain customary exceptions, not to (i) offer, sell contract to sell, pledge or otherwise dispose of, directly or indirectly, any Lockup Shares, (ii) enter into a transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Lock-Up Shares or otherwise, (iv) engage in any short sales or other arrangement with respect to the Lock-Up Shares or (v) publicly announce any intention to effect any transaction specified in clause (i), (ii) or (iii) until the date that is six months after the Closing Date (the “Lock-Up Period”). The term “Lockup Shares” mean the Merger Consideration Shares and the Earnout Shares, if any, whether or not earned prior to the end of the Lock-up Period, together with any other shares of Viveon Common Stock, and including any securities convertible into, or exchangeable for, or representing the rights to receive Viveon Common Stock, if any, acquired during the Lock-up Period. If the closing price of Viveon Common Stock equals or exceeds $ 12.50 50 Amended and Restated Registration Rights Agreement. At the Closing, Viveon will enter into an amended and restated registration rights agreement (the “Amended and Restated Registration Rights Agreement”) with certain existing stockholders of Viveon and the Company with respect to their shares of Viveon Common Stock acquired before or pursuant to the Merger, and including the shares issuable on conversion of the warrants issued to the Sponsor in connection with Viveon’s initial public offering and any shares issuable on conversion of loans or other convertible securities. The agreement amends and restates the registration rights agreement Viveon entered into on December 22, 2020 in connection with its initial public offering. Subject to the Lock-Up Agreements described above, the holders of a majority of the shares held by the existing Viveon stockholders, and the holders of a majority of the shares held by the Company stockholders will each be entitled to make one demand that the Company register such securities for resale under the Securities Act, or two demands each if Viveon is eligible to use Form S-3 or a similar short-form registration statement. In addition, the holders will have certain “piggy-back” registration rights that require Viveon to include such securities in registration statements that Viveon otherwise files. The registration rights agreement does not contain liquidating damages or other cash settlement provisions resulting from delays in registering Viveon’s securities. Viveon will bear the expenses incurred in connection with the filing of any such registration statements. The foregoing descriptions of agreements and the transactions and documents contemplated thereby are not complete and are subject to and qualified in their entirety by reference to the Merger Agreement, form of Parent Support Agreement, form of Company Support Agreement, form of Lock-Up Agreement, and form of Amended and Restated Registration Rights Agreement. Amendment to the Viveon Merger Agreement On August 28, 2023, Viveon, its subsidiary VHAC2 Merger Sub, Inc., a Delaware corporation (“Merger Sub”), the Company, Viveon Health LLC, a Delaware limited liability company (“SPAC Representative”), and Clearday SR LLC, a Delaware limited liability company (“Company Representative”) entered into the First Amendment to Viveon Merger Agreement (the “First Amendment”) that amended and modified the Viveon Merger Agreement to, among other things, (i) increase the merger consideration from $ 250,000,000 500,000,000 5 Stockdale Financing On May 22, 2023, Stockdale Associates, Ltd. (“Stockdale”), a wholly owned subsidiary of Clearday, Inc. entered into a sales transaction with James Walesa, the Chief Executive Officer of the Company, for the land of approximately 1.5 155,925 175,000 10.9 19,075 1,590 5,925 Modification of Indebtedness A subsidiary of the Company, Leander Associates Ltd., modified the terms of its mortgage loan as described in Note 8, Commitments and Contingencies. Additional Note Issuances As noted in Note 7 Indebtedness, AIU Alt Care continued to issue its Convertible Notes after March 31, 2023 to April 10, 2023. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company, including its wholly owned subsidiaries. In 2019, AIU Alternative Care, Inc., a Delaware corporation (“AIU Alt Care”) and Clearday Alternative Care Oz Fund, L.P, a Delaware limited partnership (“Clearday OZ Fund”), were formed. The Company owns all of the voting interests of AIU Alt Care and the sole general partner of Clearday OZ Fund, and less than 1 In November 2019, AIU Alt Care filed a certificate of designation that authorized preferred stock designated as the Series I 10.25 0.01 1,500,000 700,000 1,500,000 10.00 897,000 89,700 In October 2019, AIU Alt Care formed AIU Impact Management, LLC and Clearday OZ Fund were formed. AIU Impact Management, LLC manages Clearday OZ Fund as its general partner, owns 1 99 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The exchange rate for each of the Alt Care Preferred Stock and the Clearday OZ LP Interests are equal to (i) the aggregate investment amount for such security plus accrued and unpaid dividends at 10.25% per annum, (ii) divided by 80% of the 20 consecutive day volume weighted closing price of the Common Stock of Clearday preceding the conversion date. The Company reports its non-controlling interest in subsidiaries as a separate component of equity in the balance sheets and reports both net loss attributable to the non-controlling interest and net loss attributable to the Company’s common stockholders on the face of the statement of operations. |
Basis of Presentation | Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in conformity with GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). The accompanying financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. |
Classification of Convertible Preferred Stock | Classification of Convertible Preferred Stock The Company applied ASC 480, “Distinguishing Liabilities from Equity”, and revised the condensed consolidated financial statement presentation of its convertible preferred stock whose redemption is outside the control of the issuer. Registrants having such securities outstanding are required to present separately, in balance sheets, amounts applicable to the following three general classes of securities: (i) preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer; (ii) preferred stocks which are not redeemable or are redeemable solely at the option of the issuer; and (iii) common stocks. In addition, the rules require disclosure of redemption terms, five-year maturity data, and changes in redeemable preferred stock. |
Use of Estimates | Use of Estimates The Company’s condensed consolidated financial statement preparation requires that management make estimates and assumptions which affect the reporting of assets and liabilities and the related disclosure of contingent assets and liabilities in order to report these financial statements in conformity with GAAP. Actual results could differ from those estimates. |
Segment Reporting | Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business as two operating segments, the Longevity-tech Platform and personal care. |
Cash, and Restricted Cash | Cash, and Restricted Cash Cash, consisting of short-term, highly liquid investments and money market funds with original maturities of three months or less at the date of purchase, are carried at cost plus accrued interest, which approximates market value. Restricted cash includes cash that the Company deposited as security for obligations arising from property taxes, property insurance and replacement reserve the Company is required to establish escrows as required by its mortgages and certain resident security deposits. |
Accounts Receivable | Accounts Receivable The Company records accounts receivable at their estimated net realizable value. Additionally, the Company estimates allowances for uncollectible amounts based upon factors which include, but are not limited to, historical payment trends, write-off experience, and the age of the receivable as well as a review of specific accounts, the terms of the agreements, the residents, the payers’ financial capacity to pay and other factors which may include likelihood and cost of litigation. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS |
Real Estate Property and Equipment, Net | Real Estate Property and Equipment, Net Property and equipment are stated at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to operations as incurred. Depreciation and amortization are based on the straight-line method over the estimated useful lives of the related assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation and amortization are removed from the accounts, and any resulting gain or loss is reflected in operations in the period realized. Depreciation is computed on the straight-line method with useful lives as follows: Schedule of Estimated Useful Lives Asset Class Estimated Useful Life (in years) Buildings and building improvements 39 Leasehold improvements 15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 |
Intangible Assets, Net | Intangible Assets, Net |
Software Capitalization | Software Capitalization With regards to developing software, any application costs incurred during the development state, both internal expenses and those paid to third parties are capitalized and amortized per FASB Topic ASC350-40 (“Internal-Use Software Accounting & Capitalization”) . Once the software has been developed, the costs to maintain and train others for its use will be expensed. With regards to developing software, any application costs incurred during the development state, both internal expenses and those paid to third parties are capitalized and amortized based on the estimated useful life of five years |
Impairment Assessment | Impairment Assessment The Company evaluates intangible assets and other long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. This includes but is not limited to significant adverse changes in business climate, market conditions or other events that indicate an assets’ carrying amount may not be recoverable. Recoverability of these assets is measured by comparing the carrying amount of each asset to the future cash flows the asset is expected to generate. If the cash flows used in the test for recoverability are less than the carrying amount of these assets, the carrying amount of such assets is reduced to fair value. The Company evaluates and tests the recoverability of its goodwill for impairment at least annually during its fourth quarter of each fiscal year or more often if and when circumstances indicate that goodwill may not be recoverable. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from contracts with customers in accordance with ASC Topic 606, “Revenue from Contracts with Customers”, or ASC Topic 606, using the practical expedient in paragraph 606-10-10-4 that allows for the use of a portfolio approach, because we have determined that the effect of applying the guidance to our portfolios of contracts within the scope of ASC Topic 606 on our condensed consolidated financial statements would not differ materially from applying the guidance to each individual contract within the respective portfolio or our performance obligations within such portfolio. The five-step model defined by ASC Topic 606 requires the Company to: (i) identify its contracts with customers, (ii) identify its performance obligations under those contracts, (iii) determine the transaction prices of those contracts, (iv) allocate the transaction prices to its performance obligations in those contracts and (v) recognize revenue when each performance obligation under those contracts is satisfied. Revenue is recognized when promised goods or services are transferred to the customer in an amount that reflects the consideration expected in exchange for those goods or services. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A substantial portion of the Company’s revenue from its independent living and assisted living communities relates to contracts with residents for services that are generally under ASC Topic 606. The Company’s contracts with residents and other customers that are within the scope of ASC Topic 606 are generally short-term in nature. The Company has determined that services performed under those contracts are considered one performance obligation in accordance with ASC Topic 606 as such services are regarded as a series of distinct events with the same timing and pattern of transfer to the resident or customer. Revenue is recognized for those contracts when the Company’s performance obligation is satisfied by transferring control of the service provided to the resident or customer, which is generally when the services are provided over time. Resident fees at our residential communities consist of regular monthly charges for basic housing and support services and fees for additional requested services, such as assisted living services, personalized health services and ancillary services. Fees are specified in our agreements with residents, which are generally short term (30 days to one year), with regular monthly charges billed in advance. Funds received from residents in advance of services provided are not material to our condensed consolidated financial statements. Some of our senior living communities require payment of an upfront entrance fee in advance of a resident moving into the community; substantially all these community fees are non-refundable and are initially recorded as deferred revenue and included in accrued expenses and other current liabilities in our consolidated balance sheets. These deferred amounts are then amortized on a straight-line basis into revenue over the term of the resident’s agreement. When the resident no longer resides within our community, the remaining deferred non-refundable fees are recognized in revenue. Revenue recorded and deferred in connection with community fees is not material to our condensed consolidated financial statements. Revenue for basic housing and support services and additional requested services is recognized in accordance with ASC Topic 606 and measured based on the consideration specified in the resident agreement and is recorded when the services are provided. |
Resident Care Contracts | Resident Care Contracts Resident fees at the Company’s senior living communities may consist of regular monthly charges for basic housing and support services and fees for additional requested services and ancillary services. Fees are specified in the Company’s agreements with residents, which are generally short term (30 days to one year), with regular monthly charges billed on the first of the month. Funds received from residents in advance of services are not material to the Company’s condensed consolidated financial statements. Below is a table that shows the breakdown by percentage of revenues related to contracts with residents versus resident fees for support or ancillary services. Schedule of Revenue from Contract with Customers For the periods ended March 31, 2023 % 2022 % Revenue from contracts with customers: Resident rent - over time $ 2,895,326 96 % $ 3,124,761 97 % Day care 89,041 3 % 83,896 3 % Amenities and conveniences - point in time 22,137 1 % 1,561 0 % Total revenue from contracts with customers $ 3,006,504 100 % $ 3,210,218 100 % |
Financial Instruments | Financial Instruments In accordance with the reporting requirements of the FASB ASC Topic 825, “Financial Instruments”, the Company calculates the fair value of its assets and liabilities which qualify as financial instruments under this standard and includes this additional information in the notes to the condensed consolidated financial statements when the fair value is different than the carrying value of those financial instruments. The Company does not have assets or liabilities measured at fair value on a recurring basis except its derivative liability. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at the balance sheet dates, nor gains or losses reported in the statements of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held during the periods presented, except as disclosed. |
Fair Value Measurement | Fair Value Measurement ASC Topic 820, “Fair Value Measurements”, provides a comprehensive framework for measuring fair value and expands disclosures which are required about fair value measurements. Specifically, ASC 820 sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. ASC 820 defines the hierarchy as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reported date. The types of assets and liabilities included in Level 1 are highly liquid and actively traded instruments with quoted prices, such as equities listed on the New York Stock Exchange. Level 2 - Pricing inputs are other than quoted prices in active markets but are either directly or indirectly observable as of the reported date. The types of assets and liabilities in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs. Level 3 - Significant inputs to pricing that are unobservable as of the reporting date. The types of assets and liabilities included in Level 3 are those with inputs requiring significant management judgment or estimation, such as complex and subjective models and forecasts used to determine the fair value. The following tables present the Company’s assets and liabilities that were measured and recognized at fair value as of March 31, 2023 and December 31, 2022: Schedule of Assets and Liabilities Measured at Fair Value March 31, 2023 Level 1 Level 2 Level 3 Total Derivative liability - - $ 3,748,918 $ 3,748,918 December 31, 2022 Level 1 Level 2 Level 3 Total Derivative liability - - $ 2,320,547 $ 2,320,547 Under the Company’s contract ordering policy, the Company first considers common shares issued and outstanding as well as reserved but unissued equity awards, such as under an equity award program. All remaining equity linked instruments such as, but not limited to, options, warrants, and debt and equity with conversion features are evaluated based on the date of issuance. If the number of shares which may be issued under the Company’s agreements exceed the authorized number of shares or are unable to be determined, equity linked instruments from that date forward are considered to be derivative liabilities until such time as the number of shares which may be issued under the Company’s agreements no longer exceed the authorized number of shares and are able to be determined. The Company has outstanding note agreements containing provisions meeting the definition of a derivative liability which therefore require bifurcation. Further, pursuant to the Company’s contract ordering policy, any issuance of equity linked instruments subsequent to the initial triggering agreement will result in derivative liabilities. At March 31, 2023, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $ 0.51 3.60 4.94 182 421 0.35 0.43 At December 31, 2022, the Company estimated the fair value of the conversion feature derivatives embedded in the notes payable and warrants based on assumptions used in the Cox-Ross-Rubinstein binomial pricing model using the following inputs: the price of the Company’s common stock of $ 0.56 3.99 4.76 183 572 0.35 0.75 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A reconciliation of the changes in the Company’s Level 3 derivative liability at fair value is as follows: Summary of Activity of Level 3 Liabilities Balance - December 31, 2022 $ 2,320,547 Additions 3,707,038 Settlements (713,435 ) Change in fair value (1,565,232 ) Balance - March 31, 2023 $ 3,748,918 |
Convertible Instruments | Convertible Instruments The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC Topic 815, “Derivatives and Hedging Activities”. Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred and are included in operating expenses. There were no research and development costs incurred in the three months ended March 31, 2023 or 2022. |
Advertising Costs | Advertising Costs The costs of advertising are expensed as incurred. Advertising expenses are included in the Company’s operating expenses. There were no advertising expenses in the three months ended March 31, 2023 or 2022. |
Lease Accounting | Lease Accounting The Company follows ASC Topic 842, “Leases”. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. All ROU assets were written off effective March 31, 2023, when the Company disposed of the three leased properties described in Note 5 Leases. |
Income Taxes | Income Taxes The Company’s income tax expense includes U.S. income taxes. Certain items of income and expense are not reported in tax returns and financial statements in the same year. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences to be included in the Company’s condensed consolidated financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, while the effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The Company can recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that has a greater than 50% likelihood Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income, and, to the extent, the Company believes that the Company is more likely than not that all or a portion of deferred tax assets will not be realized, the Company establishes a valuation allowance to reduce the deferred tax assets to the appropriate valuation. Company includes the related tax expense or tax benefit within the tax provision in the condensed consolidated statement of operations in that period. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the future, if the Company determines that it would be able to realize its deferred tax assets in excess of their net recorded amount, the Company will make an adjustment to the deferred tax asset valuation allowance and record an income tax benefit within the tax provision in the condensed consolidated statement of operations in that period. The Company pays franchise taxes in certain states in which it has operations. The Company has included franchise taxes in general and administrative and operating expenses in its condensed consolidated statements of operations. |
Earnings Per Share | Earnings Per Share FASB ASC Topic 260, “Earnings Per Share”, requires a reconciliation of the numerator and denominator of the basic and diluted earnings (loss) per share (EPS) computations. Basic earnings (loss) per share are computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. |
Commitments and Contingencies | Commitments and Contingencies The Company has been, is currently, and expects in the future to be involved in claims, lawsuits, and regulatory and other government audits, investigations and proceedings arising in the ordinary course of the Company’s business, some of which may involve material amounts. The Company establish accruals for specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Also, the defense and resolution of these claims, lawsuits, and regulatory and other government audits, investigations and proceedings may require the Company to incur significant expense. The Company accounts for claims and litigation losses in accordance with ASC Topic 450, “Contingencies”. Under ASC Topic 450, loss contingency provisions are recorded for probable and estimable losses at the Company’s best estimate of a loss or, when a best estimate cannot be made, at the Company’s estimate of the minimum loss. These estimates are often developed prior to knowing the amount of the ultimate loss, require the application of considerable judgment, and are refined as additional information becomes known. Accordingly, the Company is often initially unable to develop a best estimate of loss and therefore the estimated minimum loss amount, which could be zero, is recorded; then, as information becomes known, the minimum loss amount is updated, as appropriate. Occasionally, a minimum or best estimate amount may be increased or decreased when events result in a changed expectation. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (a) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (b) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (c) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share for convertible instruments by using the “if-converted” method. In addition, entities must presume share settlement for purposes of calculating diluted earnings per share when an instrument may be settled in cash or shares. For smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact that ASU 2020-06 may have on its financial statements and related disclosures. CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS As of March 31, 2023, there were several new accounting pronouncements issued by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Lives | Depreciation is computed on the straight-line method with useful lives as follows: Schedule of Estimated Useful Lives Asset Class Estimated Useful Life (in years) Buildings and building improvements 39 Leasehold improvements 15 Equipment 7 Computer equipment and software 5 Furniture and fixtures 7 |
Schedule of Revenue from Contract with Customers | Below is a table that shows the breakdown by percentage of revenues related to contracts with residents versus resident fees for support or ancillary services. Schedule of Revenue from Contract with Customers For the periods ended March 31, 2023 % 2022 % Revenue from contracts with customers: Resident rent - over time $ 2,895,326 96 % $ 3,124,761 97 % Day care 89,041 3 % 83,896 3 % Amenities and conveniences - point in time 22,137 1 % 1,561 0 % Total revenue from contracts with customers $ 3,006,504 100 % $ 3,210,218 100 % |
Schedule of Assets and Liabilities Measured at Fair Value | The following tables present the Company’s assets and liabilities that were measured and recognized at fair value as of March 31, 2023 and December 31, 2022: Schedule of Assets and Liabilities Measured at Fair Value March 31, 2023 Level 1 Level 2 Level 3 Total Derivative liability - - $ 3,748,918 $ 3,748,918 December 31, 2022 Level 1 Level 2 Level 3 Total Derivative liability - - $ 2,320,547 $ 2,320,547 |
Summary of Activity of Level 3 Liabilities | A reconciliation of the changes in the Company’s Level 3 derivative liability at fair value is as follows: Summary of Activity of Level 3 Liabilities Balance - December 31, 2022 $ 2,320,547 Additions 3,707,038 Settlements (713,435 ) Change in fair value (1,565,232 ) Balance - March 31, 2023 $ 3,748,918 |
Real Estate, Property and Equ_2
Real Estate, Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Real Estate, Property and Equipment | The Company’s real estate, property and equipment consisted of the following at the respective balance sheet dates: Schedule of Real Estate, Property and Equipment March 31, December 31, Land $ 2,231,879 $ 2,231,879 Building and building improvements 4,975,243 4,975,243 Leasehold Improvements 710,317 846,754 Computers 57,192 332,809 Furniture, fixtures, and equipment 72,213 1,379,219 Other Equipment 74,937 518,145 Work in progress 138,187 138,187 Total 8,259,968 10,422,236 Less accumulated depreciation (1,938,219 ) (3,899,257 ) Real estate, property and equipment, net $ 6,321,749 $ 6,522,979 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Expected Future Amortization Expense for Intangible Assets | Acquired intangible assets subject to amortization are as follows: Schedule of Expected Future Amortization Expense for Intangible Assets March 31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life (Years) Developed technology $ 3,680,000 $ 184,000 $ 3,496,000 4.75 December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Weighted-Average Remaining Useful Life (Years) Developed technology $ 2,240,000 $ - $ 2,240,000 5.75 |
Schedule of Future Amortization Expense for Intangible Assets | Expected future amortization expense for intangible assets as of March 31, 2023 is as follows: Schedule of Future Amortization Expense for Intangible Assets Fiscal Years 2023 (remaining) $ 552,000 2024 736,000 2025 736,000 2026 736,000 2027 736,000 Thereafter - Total $ 3,496,000 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations for Consolidated Statement of Operations | Schedule of Discontinued Operations for Consolidated Statement of Operations REVENUES Commercial property rental revenue $ 14,239 Total revenues, net 14,239 Costs and expenses Operating expenses - General and administrative expenses 36,636 Total operating expenses $ 36,636 Loss from operations (22,307 ) Other/(income) expenses Interest expense 44,151 Gain on disposal of assets - Equity income from investees, net of applicable taxes - Impairment expense (recovery) - Other (income) expenses 18,768 Total (income)/expense 62,920 Net loss $ (85,227 ) |
Indebtedness (Tables)
Indebtedness (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following table summarizes the Company’s debt as of March 31, 2023 and December 31, 2022: Schedule of Long Term Debt As of March 31, Total 2022 6,839,277 2023 9,635,591 2024 1,494,886 2025 4,461,182 Thereafter 494,900 Total obligations $ 22,925,835 |
Schedule of Maturity Debt | Indebtedness of Facilities Schedule of Maturity Debt Maturity Date Interest Rate March 31, December 31, 2022 Naples Equity Loan ^ May 2023 9.95 % $ 4,550,000 $ 4,550,000 Gearhart Loan ^ December 2022 7.00 % 193,578 193,578 SBA PPP Loans # February 2022 1.00 % 1,518,682 1,518,682 Bank Direct Payable ^ December 2022 3.13 % 31,569 80,381 AIU Sixth Street February 2023 12.00 % - 49,593 1800 Diagonal Lending October 2024 12.00 % 93,408 116,760 1800 Diagonal Lending February 2024 12.00 % 173,594 - Equity Secure Fund I, LLC* June 2022 11.50 % 1,000,000 1,000,000 Invesque July 2025 10.00 % 3,458,504 - Merchant Cash Advance Loans (^^) Naples Operating PIRS Capital March 2023 0.00 % $ 338,000 $ 338,000 Little Rock Libertas February 2023 0.00 % 326,330 326,330 PIRS Capital Financing Agreement March 2023 0.00 % 144,659 144,659 Naples Samson #1 May 2023 0.00 % 76,916 76,916 Naples LG Funding #2 April 2023 0.00 % 171,170 171,170 Little Rock Premium Funding April 2023 0.00 % 211,313 211,313 Little Rock KIT Funding December 2022 0.00 % 89,400 89,400 Little Rock Samson Funding #4 February 2023 0.00 % 170,501 170,501 Naples Operating SWIFT December 2022 0.00 % 111,750 111,750 New Braunfels Samson Cloud Fund February 2023 0.00 % 308,035 308,035 New Braunfels Samson Group February 2023 0.00 % 375,804 375,804 Westover Hills One River December 2022 0.00 % 128,298 128,301 Westover Hills FOX Capitol March 2023 0.00 % 109,384 109,384 Westover Hills Arsenal October 2023 0.00 % 95,882 95,882 Westover Samson Funding March 2023 0.00 % 267,754 267,754 Notional amount of debt 13,944,531 10,434,193 Less: current maturities 13,944,531 10,434,193 $ - $ - CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Indebtedness Allocated to Assets Held For Sale Real Estate: Artesia Note June 2033 Variable $ - $ 211,721 Carpenter Enterprises Demand Note Variable 300,000 300,000 Leander Stearns National Association ^ February 2023 10.38 % 805,000 805,000 Notional amount of debt 1,105,000 1,316,721 Less: current maturities 805,000 805,000 $ 300,000 $ 511,721 Other (Corporate) Indebtedness AGP Contract ^ March 2023 5.00 % $ 550,000 $ 550,000 Cibolo Creek Partners December 2025 0.09 % 411,470 $ 421,470 Cibolo Creek Partners promissory note December 2025 0.09 % 91,208 96,208 EIDL SBA Treas 310 December 2051 3.75 % 494,900 494,900 Firstfire May 2023 12.00 % 37,195 95,054 Five C’s Loan ^ December 2022 9.85 % 325,000 325,000 GS Capital May 2023 12.00 % 12,048 50,955 Jefferson Street Capital LLC May 2023 12.00 % 33,600 84,000 KOBO, L.P. ^ October 2023 Floating % 500,000 500,000 Mast Hill LP May 2023 12.00 % 300,000 420,000 Mast Hill LP July 2023 12.00 % 252,000 315,000 Round Rock Development Partners Note December 2025 0.09 % 500,000 500,000 Jefferson Street Capital LLC (February 2023) February 2024 12.00 % 192,883 - Mast Hill LP (January 2023) January 2024 12.00 % 756,000 - Convertible Notes Issued by AIU Alternative Care, Inc. January 2024 12.00 % 279,000 - Notional amount of debt 4,735,304 3,852,587 Less: current maturities 2,009,843 2,340,009 $ 2,725,461 $ 1,512,578 TIC Purchase Agreements No Specified Date 8.00 % $ 3,141,000 $ 3,141,000 Total 22,925,835 18,744,501 Less Debt Discount & Derivatives (1,554,177 ) (1,004,271 ) Total $ 21,371,658 $ 17,740,230 ^ Obligation is in default. The interest rate noted above is the stated rate of interest and does not reflect the default rate of interest. ^^ We have ceased payment of these obligations. Obligations are subject to litigation for nonpayment, as previously reported. See Note 8 Commitments and Contingencies. # SBA PPP obligations are past due and in the Company is continuing the process to have these obligations forgiven. Obligation is in payment default. Each lender has not exercised any of their remedies and the Company continues to negotiate with each lender a payment schedule. The interest rate noted above is the stated rate of interest and does not reflect the default rate of interest. Subsequently, each lender has provided a forbearance of their remedies which was in effect as of the date of this Report. * Obligations have been modified as described in Note 13 Subsequent Events. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Anti-Dilutive Shares Compensation of Earnings (Loss) Per Share | The following tables set forth the potentially dilutive shares that were anti-dilutive in their respective periods as the Company had net losses for the periods ended March 31, 2023 and 2022, respectively. Schedule of Anti-Dilutive Shares Compensation of Earnings (Loss) Per Share 2023 2022 For the Three Months Ended Dilution shares calculation March 31, 2023 2022 Series A Convertible Preferred Stock 328,925 328,925 Series F 6.75% Convertible Preferred Stock 4,791,401 4,797,052 Series I 10.25% Convertible Preferred Stock 682,820 320,657 Limited Partnership Units 99,038 99,038 Warrants 7,618,820 4,038,801 Total participating securities 13,521,004 9,586,495 |
Deficit (Tables)
Deficit (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Summary of Outstanding Warrants | The following is a summary of such outstanding warrants at March 31 2023: Warrants (“STI Warrants”) issued by STI prior to September 9, 2021, the effective date of the AIU Merger. Summary of Outstanding Warrants Total Currently Exercisable Exercise Price per Share Expiration Date Common Shares Total Currently Exercisable Exercise Price per Share Expiration Date Warrants related to March 2018 financing 7,331 7,331 $ 245.84 September 9, 2023 Warrants related to July 2018 financing 119,241 119,241 $ 75.48 July 25, 2023 Warrants related to July 2018 financing 7,154 7,154 $ 94.35 July 25, 2023 Warrants related to May 2019 financing 5,518 5,518 $ 26.96 May 23, 2024 Warrants related to October 2019 financing 100,719 100,719 $ 5.39 October 10, 2024 Warrants related to October 2019 financing 14,336 14,336 $ 6.74 October 8, 2024 Warrants that were issued by Clearday Operations, Inc. prior to the effective date of the AIU Merger Common Shares Total Currently Exercisable Exercise Price per Share Expiration Date Warrants issued in connection with financings * 3,281,508 3,281,508 $ 5.00 November 15, 2029 Warrants issued to a consultant ^ 500,000 500,000 $ 11.00 August 10, 2026 * Two of our subsidiaries have preferred securities that are classified under GAAP as Non-Controlling Interest: (1) the preferred stock designated as the Series I 10.25% cumulative convertible preferred stock, par value $0.01 per share of AIU Alt Care (the “Alt Care Preferred Stock”); and (2) the preferred limited partnership interests of Clearday OZ Fund (the “Clearday OZ LP Interests”) As of March 31, 2023, there are 1,376,118 3,281,508 5.00 ^ The Company also has a warrant issued to a consultant representing 500,000 11.00 CLEARDAY, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Warrants issued by Clearday, Inc. after the effective date of the AIU Merger Each of the following warrants were issued in connection with a financing and provides that the warrant may only be issued upon an event of default under the related promissory note. Common Shares Outstanding Exercisable Exercise Price Maturity Date Related to the January 12, 2023, Financing (Mast Hill LP) 1,134,000 0 $ 0.75 5 years after Trigger Date Related to the September 30, 2022, Financing (Mast Hill LP) 472,500 0 $ 0.50 5 years after Trigger Date Related to the July 1, 2022, Financing (Mast Hill LP) 900,000 0 $ 0.50 5 years after Trigger Date * Trigger Date is defined as the date of an Event of Default under the promissory note that is related to the financing in which this warrant was issued, which default has not been waived. The additional warrants were also issued to lenders: Common Shares Related to the February 17, 2023, Financing (Jefferson Street Capital LLC) 225,000 225,000 $ 0.75 March 16, 2028 Related to the January 12, 2023, Financing (Mast Hill LP) 851,000 851,000 $ 0.75 February 14, 2028 |
Description of Business and G_2
Description of Business and Going Concern (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accounting Policies [Abstract] | |||
Accumulated deficit | $ 79,606,718 | $ 79,671,065 | |
Net income (loss) | 486,608 | $ 2,719,316 | |
Net cash used in operating activities | $ 1,066,342 | $ 2,080,476 | 3,978,027 |
Loss from continued operations | $ 14,462,738 |
Schedule of Estimated Useful Li
Schedule of Estimated Useful Lives (Details) | Mar. 31, 2023 |
Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 39 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 15 years |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 7 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant and equipment, estimated useful lives | 7 years |
Schedule of Revenue from Contra
Schedule of Revenue from Contract with Customers (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Product Information [Line Items] | ||
Revenues | $ 3,006,504 | $ 3,210,218 |
Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 100% | 100% |
Transferred over Time [Member] | ||
Product Information [Line Items] | ||
Revenues | $ 2,895,326 | $ 3,124,761 |
Transferred over Time [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 96% | 97% |
Transferred Day Care [Member] | ||
Product Information [Line Items] | ||
Revenues | $ 89,041 | $ 83,896 |
Transferred Day Care [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 3% | 3% |
Transferred at Point in Time [Member] | ||
Product Information [Line Items] | ||
Revenues | $ 22,137 | $ 1,561 |
Transferred at Point in Time [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member] | ||
Product Information [Line Items] | ||
Concentration risk, percentage | 1% | 0% |
Schedule of Assets and Liabilit
Schedule of Assets and Liabilities Measured at Fair Value (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative liability | $ 3,748,918 | $ 2,320,547 |
Fair Value, Inputs, Level 1 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative liability | ||
Fair Value, Inputs, Level 2 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative liability | ||
Fair Value, Inputs, Level 3 [Member] | ||
Platform Operator, Crypto-Asset [Line Items] | ||
Derivative liability | $ 3,748,918 | $ 2,320,547 |
Summary of Activity of Level 3
Summary of Activity of Level 3 Liabilities (Details) - Fair Value, Inputs, Level 3 [Member] | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Platform Operator, Crypto-Asset [Line Items] | |
Balance - December 31, 2022 | $ 2,320,547 |
Additions | 3,707,038 |
Settlements | (713,435) |
Change in fair value | (1,565,232) |
Balance - March 31, 2023 | $ 3,748,918 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2019 | Mar. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Oct. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Preferred stock, dividend rate, percentage | 6.75% | 6.75% | |||
Preferred stock, par or stated value per share | $ 0.001 | $ 0.001 | |||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |||
Classification of redeemable preferred stock, description | Registrants having such securities outstanding are required to present separately, in balance sheets, amounts applicable to the following three general classes of securities: (i) preferred stocks subject to mandatory redemption requirements or whose redemption is outside the control of the issuer; (ii) preferred stocks which are not redeemable or are redeemable solely at the option of the issuer; and (iii) common stocks. In addition, the rules require disclosure of redemption terms, five-year maturity data, and changes in redeemable preferred stock. | ||||
Estimated useful life of intangible asset | 5 years | ||||
Risk-free interest rates, minimum | 3.60% | 3.99% | |||
Risk-free interest rates, maximum | 4.94% | 4.76% | |||
Common stock expected volatility, minimum | 182% | 183% | |||
Common stock expected volatility, maximum | 421% | 572% | |||
Income tax examination description | greater than 50% likelihood | ||||
AIU Impact Management LLC [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Equity method investment, ownership percentage | 1% | ||||
Preferred Stock [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Preferred stock, dividend rate, percentage | 10.25% | ||||
Preferred stock, par or stated value per share | $ 0.001 | ||||
Preferred stock, shares authorized | 10,000,000 | ||||
Alt Care Preferred Stock [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Dividend payment restrictions schedule, description | the aggregate investment amount for such security plus accrued and unpaid dividends at 10.25% per annum, (ii) divided by 80% of the 20 consecutive day volume weighted closing price of the Common Stock of Clearday preceding the conversion date. | ||||
Common Stock [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Common stock, shares authorized | 80,000,000 | ||||
Common stock price per share | $ 0.51 | $ 0.56 | |||
AIU Alt Care Inc [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Preferred stock, shares authorized | 1,500,000 | ||||
Common stock, shares authorized | 1,500,000 | ||||
Investments | $ 897,000 | ||||
AIU Alt Care Inc [Member] | Preferred Stock [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Conversion of stock, shares converted | 89,700 | ||||
AIU Impact Management LLC [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Percentage of income and gain | 99% | ||||
Series I Cumulative Convertible Preferred Stock [Member] | AIU Alt Care Inc [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Preferred stock, dividend rate, percentage | 10.25% | ||||
Preferred stock, par or stated value per share | $ 0.01 | ||||
Alt Care Preferred Stock [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Preferred stock, par or stated value per share | $ 10 | ||||
Preferred stock, shares authorized | 700,000 | ||||
Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Exercise prices | 0.43 | 0.75 | |||
Minimum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Exercise prices | $ 0.35 | $ 0.35 | |||
AIU Alternative Care Inc [Member] | Maximum [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Percentage of voting interest acquired | 1% |
Schedule of Real Estate, Proper
Schedule of Real Estate, Property and Equipment (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, net | $ 6,321,749 | $ 6,522,979 |
Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | 8,259,968 | 10,422,236 |
Less accumulated depreciation | (1,938,219) | (3,899,257) |
Real estate, property and equipment, net | 6,321,749 | 6,522,979 |
Land [Member] | Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | 2,231,879 | 2,231,879 |
Building Improvements [Member] | Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | 4,975,243 | 4,975,243 |
Leasehold Improvements [Member] | Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | 710,317 | 846,754 |
Computer Equipment [Member] | Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | 57,192 | 332,809 |
Furniture, Fixtures and Equipment [Member] | Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | 72,213 | 1,379,219 |
Equipment [Member] | Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | 74,937 | 518,145 |
Construction in Progress [Member] | Memory Care Facilities and Corporate [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Real estate, property and equipment, gross | $ 138,187 | $ 138,187 |
Real Estate, Property and Equ_3
Real Estate, Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Impairment Effects on Earnings Per Share [Line Items] | |||
Depreciation, Depletion and Amortization | $ 296,826 | $ 187,215 | |
Property, Plant and Equipment [Member] | |||
Impairment Effects on Earnings Per Share [Line Items] | |||
Depreciation, Depletion and Amortization | $ 112,826 | $ 501,797 |
Schedule of Expected Future Amo
Schedule of Expected Future Amortization Expense for Intangible Assets (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Weighted-Average Remaining Useful Life | 5 years | |
Development Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible Assets, Gross (Excluding Goodwill) | $ 3,680,000 | $ 2,240,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | 184,000 | |
Intangible Assets, Net (Excluding Goodwill) | $ 3,496,000 | $ 2,240,000 |
Weighted-Average Remaining Useful Life | 4 years 9 months | 5 years 9 months |
Schedule of Future Amortization
Schedule of Future Amortization Expense for Intangible Assets (Details) | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (remaining) | $ 552,000 |
2024 | 736,000 |
2025 | 736,000 |
2026 | 736,000 |
2027 | 736,000 |
Thereafter | |
Total | $ 3,496,000 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Capitalized computer software, net | $ 3,496,000 | $ 2,240,000 |
Finite-lived intangible asset, useful life | 5 years | |
Amortization | $ 184,000 | $ 0 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Repayments amount | $ 977,263 | ||
Lease Transition Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Past due community lease amounts | $ 1,284,770 | 1,284,770 | |
Rent differential amount | 1,710,777 | 1,710,777 | |
Critical expenses advances | $ 275,000 | 275,000 | |
Repayments percentage | 10% | ||
Lease Transition Agreement [Member] | July 31, 2023 [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Lease cost | $ 300,000 | ||
Excess cash flow, rate | 10% | ||
Lease Transition Agreement [Member] | December 31, 2023 [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Quarterly payment | $ 400,000 | ||
Lease Transition Agreement [Member] | Maximum [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Critical expenses advances | 25,000 | $ 25,000 | |
Repayments amount | 500,000 | ||
Lease Transition Agreement [Member] | Minimum [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Repayments amount | 300,000 | ||
Community Lease Transition Agreement [Member] | |||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||
Repayments amount | $ 4,000,000 |
Schedule of Discontinued Operat
Schedule of Discontinued Operations for Consolidated Statement of Operations (Details) | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
REVENUES | |
Total revenues, net | $ 14,239 |
Costs and expenses | |
Operating expenses | |
General and administrative expenses | 36,636 |
Total operating expenses | 36,636 |
Loss from operations | (22,307) |
Other/(income) expenses | |
Interest expense | 44,151 |
Gain on disposal of assets | |
Equity income from investees, net of applicable taxes | |
Impairment expense (recovery) | |
Other (income) expenses | 18,768 |
Total (income)/expense | 62,920 |
Net loss | (85,227) |
Commercial Property Rental Revenue [Member] | |
REVENUES | |
Total revenues, net | $ 14,239 |
Schedule of Long Term Debt (Det
Schedule of Long Term Debt (Details) | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 6,839,277 |
2023 | 9,635,591 |
2024 | 1,494,886 |
2025 | 4,461,182 |
Thereafter | 494,900 |
Total obligations | $ 22,925,835 |
Schedule of Maturity Debt (Deta
Schedule of Maturity Debt (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | |||
Short-Term Debt [Line Items] | ||||
Long term debt, non-current | $ 4,624,723 | $ 1,392,940 | ||
Indebtedness Allocated To Assets Held For Sale [Member] | ||||
Short-Term Debt [Line Items] | ||||
Notional amount of debt | 1,105,000 | 1,316,721 | ||
Less: current maturities | 805,000 | 805,000 | ||
Notes payable | $ 300,000 | 511,721 | ||
Indebtedness Allocated To Assets Held For Sale [Member] | Artesia Note [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | June 2033 | |||
Notional amount of debt | 211,721 | |||
Indebtedness Allocated To Assets Held For Sale [Member] | Carpenter Enterprises [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | Demand Note | |||
Notional amount of debt | $ 300,000 | 300,000 | ||
Indebtedness Allocated To Assets Held For Sale [Member] | Leander Stearns National Association [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [1] | February 2023 | ||
Interest Rate | [1] | 10.38% | ||
Notional amount of debt | [1] | $ 805,000 | 805,000 | |
Other Corporate Indebtedness [Member] | ||||
Short-Term Debt [Line Items] | ||||
Notional amount of debt | 4,735,304 | 3,852,587 | ||
Long term debts current | 2,009,843 | 2,340,009 | ||
Long term debts non current | 2,725,461 | 1,512,578 | ||
Notes payable gross | [2] | 22,925,835 | 18,744,501 | |
Less debt discount & derivatives | [2] | (1,554,177) | (1,004,271) | |
Notes payable net | [2] | $ 21,371,658 | 17,740,230 | |
Other Corporate Indebtedness [Member] | AIU Alternative Care Inc [Member] | ||||
Short-Term Debt [Line Items] | ||||
Interest Rate | 12% | |||
Notional amount of debt | [2] | $ 279,000 | ||
Other Corporate Indebtedness [Member] | AGP contract [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [1] | March 2023 | ||
Interest Rate | [1] | 5% | ||
Notional amount of debt | [1] | $ 550,000 | 550,000 | |
Other Corporate Indebtedness [Member] | Cibolo Creek Partners [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | December 2025 | |||
Interest Rate | 0.09% | |||
Notional amount of debt | $ 411,470 | 421,470 | ||
Other Corporate Indebtedness [Member] | Cibolo Creek Partners Promissory Note [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | December 2025 | |||
Interest Rate | 0.09% | |||
Notional amount of debt | $ 91,208 | 96,208 | ||
Other Corporate Indebtedness [Member] | EIDL SBA Treas 310 [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | December 2051 | |||
Interest Rate | 3.75% | |||
Notional amount of debt | $ 494,900 | 494,900 | ||
Other Corporate Indebtedness [Member] | Firstfire [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | May 2023 | |||
Notional amount of debt | $ 37,195 | 95,054 | ||
Other Corporate Indebtedness [Member] | GS Capital [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | May 2023 | |||
Interest Rate | 12% | |||
Notional amount of debt | $ 12,048 | 50,955 | ||
Other Corporate Indebtedness [Member] | Five C Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [1] | December 2022 | ||
Interest Rate | [1] | 9.85% | ||
Notional amount of debt | [1] | $ 325,000 | 325,000 | |
Other Corporate Indebtedness [Member] | Jefferson Street Capital LLC [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [3] | May 2023 | ||
Interest Rate | [3] | 12% | ||
Notional amount of debt | [3] | $ 33,600 | 84,000 | |
Other Corporate Indebtedness [Member] | KOBOLP [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [1] | October 2023 | ||
Notional amount of debt | [1] | $ 500,000 | 500,000 | |
Other Corporate Indebtedness [Member] | Mast Hill Note 1 [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [3] | May 2023 | ||
Interest Rate | [3] | 12% | ||
Notional amount of debt | [3] | $ 300,000 | 420,000 | |
Other Corporate Indebtedness [Member] | Mast Hill Note 2 [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [3] | July 2023 | ||
Interest Rate | [3] | 12% | ||
Notional amount of debt | [3] | $ 252,000 | 315,000 | |
Other Corporate Indebtedness [Member] | Round Rock Development Partners Note [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | December 2025 | |||
Interest Rate | 0.09% | |||
Notional amount of debt | $ 500,000 | 500,000 | ||
Other Corporate Indebtedness [Member] | Jefferson Street Capital LLC February 2023 [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | February 2024 | |||
Interest Rate | 12% | |||
Notional amount of debt | $ 192,883 | |||
Other Corporate Indebtedness [Member] | Mast Hill LP January 2023 [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | January 2024 | |||
Interest Rate | 12% | |||
Notional amount of debt | [2] | $ 756,000 | ||
Other Corporate Indebtedness [Member] | Convertible Notes Issued by AIU Alternative Care, Inc. [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | January 2024 | |||
Other Corporate Indebtedness [Member] | TIC Purchase Agreements [Member] | ||||
Short-Term Debt [Line Items] | ||||
Interest Rate | 8% | |||
Notional amount of debt | [2] | $ 3,141,000 | 3,141,000 | |
Indebtedness of Facilities [Member] | Naples Mortgage Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [1] | May 2023 | ||
Interest Rate | [1] | 9.95% | ||
Notional amount of debt | [1] | $ 4,550,000 | 4,550,000 | |
Indebtedness of Facilities [Member] | Gearhart Loan [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [1] | December 2022 | ||
Interest Rate | [1] | 7% | ||
Notional amount of debt | [1] | $ 193,578 | 193,578 | |
Indebtedness of Facilities [Member] | SBA PPP Loans [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [4] | February 2022 | ||
Interest Rate | [4] | 1% | ||
Notional amount of debt | [4] | $ 1,518,682 | 1,518,682 | |
Indebtedness of Facilities [Member] | Bank Direct Payable [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [1] | December 2022 | ||
Interest Rate | [1] | 3.13% | ||
Notional amount of debt | [1] | $ 31,569 | 80,381 | |
Indebtedness of Facilities [Member] | AIU Sixth Street [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | February 2023 | |||
Interest Rate | 12% | |||
Notional amount of debt | 49,593 | |||
Indebtedness of Facilities [Member] | 1800 Diagonal Lending [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | October 2024 | |||
Interest Rate | 12% | |||
Notional amount of debt | $ 93,408 | 116,760 | ||
Indebtedness of Facilities [Member] | 1800 Diagonal Lending One [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | February 2024 | |||
Interest Rate | 12% | |||
Notional amount of debt | $ 173,594 | |||
Indebtedness of Facilities [Member] | Equity Secure Fund I, LLC [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [2] | June 2022 | ||
Interest Rate | [2] | 11.50% | ||
Notional amount of debt | [2] | $ 1,000,000 | 1,000,000 | |
Indebtedness of Facilities [Member] | Inyesque [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | July 2025 | |||
Interest Rate | 10% | |||
Notional amount of debt | $ 3,458,504 | [2] | ||
Merchant Cash Advance Loans [Member] | ||||
Short-Term Debt [Line Items] | ||||
Notional amount of debt | [5] | 13,944,531 | 10,434,193 | |
Less: current maturities | [5] | 13,944,531 | 10,434,193 | |
Long term debt, non-current | [5] | |||
Merchant Cash Advance Loans [Member] | Naples Operating PIRS Capital [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | March 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 338,000 | 338,000 | |
Merchant Cash Advance Loans [Member] | Little Rock Libertas [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | February 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 326,330 | 326,330 | |
Merchant Cash Advance Loans [Member] | PIRS Capital Financing Agreement [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | March 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 144,659 | 144,659 | |
Merchant Cash Advance Loans [Member] | Naples Samson [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | May 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 76,916 | 76,916 | |
Merchant Cash Advance Loans [Member] | Naples LG Funding [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | April 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 171,170 | 171,170 | |
Merchant Cash Advance Loans [Member] | Little Rock Premium Funding [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | April 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 211,313 | 211,313 | |
Merchant Cash Advance Loans [Member] | Little Rock KIT Funding [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | December 2022 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 89,400 | 89,400 | |
Merchant Cash Advance Loans [Member] | Little Rock Samson Funding [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | February 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 170,501 | 170,501 | |
Merchant Cash Advance Loans [Member] | Naples Operating SWIFT [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | December 2022 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 111,750 | 111,750 | |
Merchant Cash Advance Loans [Member] | New Braunfels Samson Cloud Fund [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | February 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 308,035 | 308,035 | |
Merchant Cash Advance Loans [Member] | New Braunfels Samson Group [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | February 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 375,804 | 375,804 | |
Merchant Cash Advance Loans [Member] | Westover Hills One River [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | December 2022 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 128,298 | 128,301 | |
Merchant Cash Advance Loans [Member] | Westover Hills FOX Capital [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | March 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 109,384 | 109,384 | |
Merchant Cash Advance Loans [Member] | Westover Hills Arsenal [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | October 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 95,882 | 95,882 | |
Merchant Cash Advance Loans [Member] | Westover Samson Funding [Member] | ||||
Short-Term Debt [Line Items] | ||||
Maturity Date | [5] | March 2023 | ||
Interest Rate | [5] | 0% | ||
Notional amount of debt | [5] | $ 267,754 | $ 267,754 | |
[1]Obligation is in default. The interest rate noted above is the stated rate of interest and does not reflect the default rate of interest.[2]Obligations have been modified as described in Note 13 Subsequent Events.[3]Obligation is in payment default. Each lender has not exercised any of their remedies and the Company continues to negotiate with each lender a payment schedule. The interest rate noted above is the stated rate of interest and does not reflect the default rate of interest. Subsequently, each lender has provided a forbearance of their remedies which was in effect as of the date of this Report.[4]SBA PPP obligations are past due and in the Company is continuing the process to have these obligations forgiven.[5]We have ceased payment of these obligations. Obligations are subject to litigation for nonpayment, as previously reported. See Note 8 Commitments and Contingencies. |
Indebtedness (Details Narrative
Indebtedness (Details Narrative) - USD ($) | 2 Months Ended | 3 Months Ended | |||||||
Apr. 10, 2023 | Feb. 17, 2023 | Feb. 10, 2023 | Jan. 27, 2023 | Jan. 13, 2023 | Apr. 10, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Short-Term Debt [Line Items] | |||||||||
Long term debt | $ 22,925,835 | ||||||||
Incurred interest expense | $ 714,833 | $ 501,598 | |||||||
Number of share | 4,218,158 | 4,218,158 | |||||||
Share price | $ 5 | ||||||||
Warrant One [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Share price | 245.84 | ||||||||
Warrant Two [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Share price | $ 75.48 | ||||||||
Jefferson Street Capital LLC [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt instrument, description | Upon any Event of Default, the obligations under the Jefferson Street Note will accrue interest at an annual rate of 22% and, if such Event of Default is continuing at any time that is 180 days after the date of the Jefferson Street Note, provide the Jefferson Street Noteholder the right and option to convert the obligations under the Jefferson Street Note to shares of Clearday’s common stock. The price for any such conversion is equal to 75% (or a 25% discount) of the average of the five (5) lowest per share daily volume-weighted average price of Clearday’s common stock over the ten (10) consecutive trading days that are not subject to specified market disruptions immediately preceding the date of the conversion. The conversion right of the holder of the Jefferson Street Note is subject to a customary limitation on beneficial ownership of 4.99% of Clearday’s common stock. Each of the Jefferson Street Note and the Securities Purchase Agreement has other customary covenants and provisions, including representations and warranties, payment of brokers, and indemnification, that Clearday will not sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary course of business without the consent of the holder of the Jefferson Street Note and Clearday will maintain a reserve of authorized and unissued shares of common stock sufficient for full conversion of the obligations under the Jefferson Street Note. | ||||||||
Mast Hill Financing [Member] | MH Loan One Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Loan principal amount | $ 756,000 | ||||||||
Discount | 75,600 | ||||||||
Placement fees | 68,040 | ||||||||
Debt discount | 12,000 | ||||||||
Proceeds from debt | $ 213,000 | ||||||||
Convertible debt, percentage | 12% | ||||||||
Maturity date | Jan. 26, 2024 | ||||||||
Total payback | $ 75,600 | ||||||||
Administrative fee | $ 750 | ||||||||
Mast Hill Financing [Member] | MH Loan One Note [Member] | Common Stock [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Number of share | 83,160 | ||||||||
Share price | $ 0.50 | ||||||||
Debt description | (1) a bona fide offer of capital or financing from a nationally recognized broker dealer that is retained by Borrower and acceptable to the Holder, which acceptance will not be unreasonably delayed, withheld or conditioned (“Investment Banker”), or any person or party that is introduced to the Company by the Investment Banker in its capacity as a placement agent, (ii) a bona fide offer of capital or financing from a person or party if such capital or financing is used by the Company for the acquisition or refinance of real property so long as (a) any security interest granted to such person or party is solely limited to the real property being acquired or refinanced and (b) such person or party shall have no rights at any time in such transaction or any related transaction to acquire Common Stock or Common Stock Equivalents of the Company (each a “Real Property Transaction”), as well as (iii) a bona fide offer of specified capital or financing through certain financing transactions. MH Loan 1 Note is subject to repayment from the use of proceeds of certain transactions. If, prior to the full repayment or satisfaction of the MH Loan 1 Note’s obligations, the Company receives cash proceeds of more than $2,000,000.00 (the “Minimum Threshold”) in the aggregate, from the sale of assets or issuance of the Company’s securities, including pursuant to an Equity Line of Credit (as defined in MH Loan 1 Note), then the Lender may require us to apply up to 50% of such proceeds after the Minimum Threshold to repay all or any portion of the outstanding obligation under the Note; provided that such repayment obligation is not applicable to Real Property Transactions, the sale of assets to customers of the Company in the ordinary course of business, the sale of interests in real estate, or any Small Business Administration Economic Injury Disaster Loan. Additionally, the Company provided the lender with rights to receive terms provided under any other financing transaction that are more favorable than under MH Loan 1 Note, other than Real Property Transactions and certain other transactions. | ||||||||
Mast Hill Financing [Member] | MH Loan One Note [Member] | Common Stock [Member] | Warrant One [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Warrants exercised | 1,134,000 | ||||||||
Share price | $ 0.75 | ||||||||
Mast Hill Financing [Member] | MH Loan One Note [Member] | Common Stock [Member] | Warrant Two [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Warrants exercised | 851,000 | ||||||||
Share price | $ 0.75 | ||||||||
Mast Hill Financing [Member] | MH Loan One Note [Member] | Maximum [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Convertible debt, percentage | 16% | ||||||||
Debt additional percent | 10% | ||||||||
Thousand Eight Hundred Diagonal Lending [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Incurred interest expense | $ 4,250 | ||||||||
Discount | 19,286 | ||||||||
Proceeds from Issuance of Debt | $ 150,000 | ||||||||
Interest rate | 12% | ||||||||
Thousand Eight Hundred Diagonal Lending [Member] | Unsecured Promissory Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Loan principal amount | $ 194,360 | ||||||||
Discount | 20,824 | ||||||||
Total payback | 21,768 | ||||||||
Debt Instrument, Decrease, Forgiveness | 19,280 | ||||||||
Securities Purchase Agreement [Member] | Jefferson Street Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Loan principal amount | $ 135,000 | ||||||||
Discount | 22,217 | ||||||||
Placement fees | 15,000 | ||||||||
Total payback | $ 19,288.30 | ||||||||
Number of share | 225,000 | ||||||||
Share price | $ 0.75 | ||||||||
Principal amount | $ 172,217 | $ 194,360 | |||||||
Interest rate | 12% | ||||||||
Fee amount | $ 20,666 | ||||||||
Maturity description | one-year maturity | ||||||||
Payment frequency | shall be paid in ten (10) payments | ||||||||
Total payback | $ 192,883 | ||||||||
One Thousand Eight Hundred Diagonal [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Debt instrument, description | Upon any Event of Default, the obligations under the 1800 Note will accrue interest at an annual rate of 22% and, if such Event of Default is continuing at any time that is 180 days after the date of the 1800 Note, provide the 1800 Noteholder the right and option to convert the obligations under the 1800 Note to shares of Clearday’s common stock. The price for any such conversion is equal to 75% (or a 25% discount) of the average of the five (5) lowest per share daily volume-weighted average price of Clearday’s common stock over the ten (10) consecutive trading days that are not subject to specified market disruptions immediately preceding the date of the conversion. The conversion right of the 1800 Noteholder is subject to a customary limitation on beneficial ownership of 4.99% of Clearday’s common stock. | ||||||||
Innovative Care [Member] | Convertible Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Convertible debt, percentage | 10% | ||||||||
Share price | $ 0.75 | ||||||||
Gross proceeds | $ 549,000 | $ 279,000 | |||||||
Interest rate | 12% | 12% | |||||||
Innovative Care [Member] | Convertible Note [Member] | Minimum [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Interest rate | 1% | 1% | |||||||
Innovative Care [Member] | Equity Securities [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Gross proceeds | $ 5,000,000 | ||||||||
Innovative Care [Member] | Convertible Debt Securities [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Gross proceeds | $ 5,000,000 | ||||||||
Memory Care Core and Corporate Facilities [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Long term debt | $ 16,746,935 | $ 16,347,290 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |||
Oct. 21, 2022 | Aug. 05, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | |
Loss Contingency, Damages Awarded, Value | $ 2,801,365 | |||
Aggregate amount | $ 3,012,011 | |||
Release of cash | 2,763,936 | $ 81,429 | $ 195,638 | |
Payment of cash | $ 248,075 | |||
Loss contingency accrual at carrying value | 467,451 | 311,000 | ||
Accrued liabilities | 261,000 | |||
Accrued underpaid payroll tax | 1,097,000 | |||
Accrued underpayment excluding taxes, penalties and interest | 978,000 | $ 527,000 | ||
Loss contingency damages value | 2,925,195 | |||
Merger and claiming damages | $ 1,531,640 | |||
Percentage of fee payable | 2% | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Series A Preferred Stock [Member] | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Law Firm Rigrodsky Law, P.A [Member] | ||||
Merger and claiming damages | $ 200,000 | |||
Clearday Oz Fund [Member] | ||||
Warrant price per share | $ 10 | |||
AIU Alt Care Inc [Member] | Series A Preferred Stock [Member] | ||||
Common stock price per share | 10 | |||
Preferred stock, par value | $ 20 |
Schedule of Anti-Dilutive Share
Schedule of Anti-Dilutive Shares Compensation of Earnings (Loss) Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total participating securities | 13,521,004 | 9,586,495 |
Series A Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total participating securities | 328,925 | 328,925 |
Series F 6.75% Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total participating securities | 4,791,401 | 4,797,052 |
Series I 10.25% Cumulative Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total participating securities | 682,820 | 320,657 |
Limited Partnership Units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total participating securities | 99,038 | 99,038 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total participating securities | 7,618,820 | 4,038,801 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | ||
Guarantee fee, percentage | 1% | |
Richard Morris [Member] | ||
Related Party Transaction [Line Items] | ||
Unsecured debt | $ 330,175 | |
Payments for rent | 94,650 | |
Jim Walesa [Member] | ||
Related Party Transaction [Line Items] | ||
Loan fee | 44,165 | |
Christin Hemmens [Member] | ||
Related Party Transaction [Line Items] | ||
Unsecured short term debt | 130,000 | |
BJ Parrish [Member] | ||
Related Party Transaction [Line Items] | ||
Loan fee | $ 44,000 | |
AIU Inc [Member] | Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 66,208 | |
Cibolo Creek Partners LLC [Member] | Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | 411,470 | |
Round Rock Development Partners LP [Member] | Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Due to related parties | $ 500,000 |
Summary of Outstanding Warrants
Summary of Outstanding Warrants (Details) - $ / shares | Feb. 17, 2023 | Jan. 12, 2023 | Sep. 30, 2022 | Jul. 01, 2022 | Mar. 31, 2023 | |
Class of Warrant or Right [Line Items] | ||||||
Exercise price per share | $ 5 | |||||
Warrant One [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | 7,331 | |||||
Currently exercisable | 7,331 | |||||
Exercise price per share | $ 245.84 | |||||
Expiration date | Sep. 09, 2023 | |||||
Warrant Two [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | 119,241 | |||||
Currently exercisable | 119,241 | |||||
Exercise price per share | $ 75.48 | |||||
Expiration date | Jul. 25, 2023 | |||||
Warrant Three [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | 7,154 | |||||
Currently exercisable | 7,154 | |||||
Exercise price per share | $ 94.35 | |||||
Expiration date | Jul. 25, 2023 | |||||
Warrant Four [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | 5,518 | |||||
Currently exercisable | 5,518 | |||||
Exercise price per share | $ 26.96 | |||||
Expiration date | May 23, 2024 | |||||
Warrant Five [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | 100,719 | |||||
Currently exercisable | 100,719 | |||||
Exercise price per share | $ 5.39 | |||||
Expiration date | Oct. 10, 2024 | |||||
Warrant Six [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | 14,336 | |||||
Currently exercisable | 14,336 | |||||
Exercise price per share | $ 6.74 | |||||
Expiration date | Oct. 08, 2024 | |||||
AIU Warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | [1] | 3,281,508 | ||||
Currently exercisable | [1] | 3,281,508 | ||||
Exercise price per share | [1] | $ 5 | ||||
Expiration date | [1] | Nov. 15, 2029 | ||||
AIU Warrants One [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Total | [2] | 500,000 | ||||
Currently exercisable | [2] | 500,000 | ||||
Exercise price per share | [2] | $ 11 | ||||
Expiration date | [2] | Aug. 10, 2026 | ||||
AIU Merger To Lender Warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Outstanding | 1,134,000 | 472,500 | 900,000 | |||
Exercisable | 0 | 0 | 0 | |||
Exercise price | $ 0.75 | $ 0.50 | $ 0.50 | |||
Maturity date | [3] | 5 years after Trigger Date | 5 years after Trigger Date | 5 years after Trigger Date | ||
Additional Lender Warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ||||||
Outstanding | 225,000 | 851,000 | ||||
Exercisable | 225,000 | 851,000 | ||||
Exercise price | $ 0.75 | $ 0.75 | ||||
Maturity date | March 16, 2028 | February 14, 2028 | ||||
[1]Two of our subsidiaries have preferred securities that are classified under GAAP as Non-Controlling Interest: (1) the preferred stock designated as the Series I 10.25% cumulative convertible preferred stock, par value $0.01 per share of AIU Alt Care (the “Alt Care Preferred Stock”); and (2) the preferred limited partnership interests of Clearday OZ Fund (the “Clearday OZ LP Interests”) As of March 31, 2023, there are 1,376,118 3,281,508 5.00 500,000 11.00 |
Summary of Outstanding Warran_2
Summary of Outstanding Warrants (Details) (Parenthetical) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Warrants description | (1) the preferred stock designated as the Series I 10.25% cumulative convertible preferred stock, par value $0.01 per share of AIU Alt Care (the “Alt Care Preferred Stock”); and (2) the preferred limited partnership interests of Clearday OZ Fund (the “Clearday OZ LP Interests”) |
Warrants to purchase common stock | 1 |
Warrants exercise price | $ / shares | $ 5 |
Consultant [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Warrants to purchase common stock | 500,000 |
Warrants exercise price | $ / shares | $ 11 |
Clearday OZ LP Interests [Member] | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |
Warrants issued | 1,376,118 |
Warrants to purchase common stock | 3,281,508 |
Warrants exercise price | $ / shares | $ 5 |
Deficit (Details Narrative)
Deficit (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Jan. 27, 2023 | Nov. 30, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, shares authorised | 10,000,000 | 10,000,000 | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||
Shares outstanding | 4,218,158 | 4,218,158 | |||
Voting rights | Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors | ||||
Dividend rate percentage | 6.75% | 6.75% | |||
Risk-free interest rates, minimum | 3.60% | 3.99% | |||
Risk-free interest rates, maximum | 4.94% | 4.76% | |||
Expected volatility, minimum | 182% | 183% | |||
Expected volatility, maximum | 421% | 572% | |||
Net loss | $ (486,608) | $ (2,948,808) | |||
Warrant term | 10 years | ||||
Warrant rights | 1 | ||||
Share price | $ 5 | ||||
Accured dividends | $ 682,820 | ||||
AIU Alt Care Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Ownership interest | 99% | ||||
Consultants [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Stock issued | 4,326,415 | ||||
Stock issued | 25,097 | ||||
Minimum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Exercise prices | $ 0.35 | $ 0.35 | |||
Maximum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Exercise prices | $ 0.43 | $ 0.75 | |||
Series F Convertible Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Dividend rate percentage | 6.75% | ||||
Series F Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, shares authorised | 10,000,000 | ||||
Preferred stock, par value | $ 0.001 | ||||
Dividend rate percentage | 6.75% | 6.75% | |||
Preferred stock, shares outstanding | 4,791,401 | ||||
Series F Preferred Stock [Member] | Consultants [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Stock issued upon conversion | 48,802 | ||||
Series A Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, shares authorised | 2,000,000 | 2,000,000 | |||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||
Preferred stock, shares issued | 328,925 | 328,925 | |||
Preferred stock, shares outstanding | 328,925 | 328,925 | |||
Preferred stock liquidation preference | $ 0.01 | ||||
Series F 6.75% Convertible Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Dividends preferred stock | $ 1,698,784 | $ 1,619,015 | |||
Convertible Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Dividend rate percentage | 10.25% | ||||
Thinktiv Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Accrued payables | $ 3,248,000 | 3,248,000 | |||
AIU Alt Care Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock, shares authorised | 1,500,000 | ||||
Preferred stock, shares authorised | 1,500,000 | ||||
Capital units authorised | 700,000 | ||||
AIU Alt Care Inc [Member] | Allied Integral United Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Conversion of stock description | Common Stock is equal to (i) the aggregate investment amount for such security plus accrued dividends at 10.25% per annum, (ii) divided by 80% of the 20 consecutive day volume weighted closing price of the Common Stock of Clearday preceding the conversion date. Prior to the merger, these securities were exchangeable to shares of AIU common stock at a rate of 1 share for every $10.00 of aggregate amount of the investment plus such accrued dividends. | ||||
Net loss | 16,190 | ||||
Income (Loss) attributable to noncontrolling interest, before tax | $ 16,028 | 3,252 | |||
AIU Alt Care Inc [Member] | Series A Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, par value | $ 20 | ||||
AIU Alt Care Inc [Member] | Series I Cumulative Convertible Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, par value | $ 0.01 | ||||
Dividend rate percentage | 10.25% | ||||
AIU Alt Care Inc [Member] | Series I Cumulative Convertible Preferred Stock [Member] | Allied Integral United Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Shares outstanding | 89,700 | ||||
AIU Alt Care Inc [Member] | Allied Integral United Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, shares authorised | 1,500,000 | ||||
AIU Alt Care Inc [Member] | Allied Integral United Inc [Member] | Series I 10.25% Cumulative Convertible Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, par value | $ 0.01 | ||||
AIU Alt Care Inc [Member] | Partnership Interest [Member] | Series I Cumulative Convertible Preferred Stock [Member] | Allied Integral United Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Shares outstanding | 244,473 | ||||
Clearday Oz Fund [Member] | Allied Integral United Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Net loss | $ 540,330 | ||||
Income (Loss) attributable to noncontrolling interest, before tax | 534,927 | 145,772 | |||
Clearday Oz Fund [Member] | Partnership Interest [Member] | Allied Integral United Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Conversion of stock | $ 0 | 0 | |||
Conversion price | 80% | ||||
Warrants outstanding | 2,010,150 | ||||
Common Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock, shares authorised | 80,000,000 | ||||
Common stock price per share | $ 0.51 | $ 0.56 | |||
Stock issued upon conversion | 13,449 | ||||
Net loss | |||||
Common Stock [Member] | Series F Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, par value | $ 2.38 | ||||
Common Stock [Member] | Superconductor Technologies Inc [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Voting rights | The vote of most minority stockholders applies when an individual or entity and its affiliates or associates together own more than 50% of the voting power of the Company’s then outstanding capital stock | ||||
Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, shares authorised | 10,000,000 | ||||
Preferred stock, par value | $ 0.001 | ||||
Dividend rate percentage | 10.25% | ||||
Preferred Stock [Member] | Series A 6.75% Cumulative Convertible Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, par value | $ 0.001 | $ 0.001 | |||
Shares outstanding | 5,000,000 | ||||
Preferred stock, shares issued | 4,791,401 | 4,797,052 | |||
Preferred stock, shares outstanding | 4,791,401 | 4,797,052 | |||
Preferred Stock [Member] | Series F Preferred Stock [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Preferred stock, par value | $ 20 | ||||
Warrant [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Common stock price per share | $ 0.51 | ||||
Risk-free interest rates, minimum | 3.60% | ||||
Risk-free interest rates, maximum | 4.94% | ||||
Expected volatility, minimum | 182% | ||||
Expected volatility, maximum | 421% | ||||
Warrant [Member] | Minimum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Exercise prices | $ 0.35 | ||||
Warrant [Member] | Maximum [Member] | |||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Exercise prices | $ 0.43 |
Mezzanine Equity (Details Narra
Mezzanine Equity (Details Narrative) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Series F Preferred Stock [Member] | ||
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, par value | $ 0.001 | |
Preferred stock shares designated | 5,000,000 | |
Preferred stock shares outstanding | 4,791,401 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) $ / shares in Units, shares in Millions | 3 Months Ended | |||||
Aug. 28, 2023 USD ($) shares | May 22, 2023 USD ($) a | Apr. 05, 2023 USD ($) $ / shares | Mar. 31, 2023 USD ($) $ / shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares | |
Subsequent Event [Line Items] | ||||||
Equal amount | $ 136,564 | $ 136,564 | ||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Net tangible assets | $ 6,321,749 | $ 6,522,979 | ||||
Merger consideration | $ 250,000,000 | |||||
Maximum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Merger consideration | $ 500,000,000 | |||||
Series A Convertible Preferred Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||
Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Additional shares issued | shares | 5 | |||||
Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Equal amount | ||||||
Share price, per share | $ / shares | $ 0.51 | $ 0.56 | ||||
Subsequent Event [Member] | James Walesa [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Area of land | a | 1.5 | |||||
Purchase price | $ 155,925 | |||||
Repurchase asset | $ 175,000 | |||||
Repurchase asset interest | 10.90% | |||||
Repurchase asset | $ 19,075 | |||||
Repurchase asset | 1,590 | |||||
Business combination gain | $ 5,925 | |||||
Subsequent Event [Member] | Incentive Plan [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Initial aggregate share reserve equal, rate | 8% | |||||
Subsequent Event [Member] | Merger Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Share price per share | $ / shares | $ 10 | |||||
Conversion of stock, description | (i) the sum of $250 Million, plus the aggregate exercise or conversion price of outstanding the Company’s stock options and warrants (excluding unvested options and options or warrants with an exercise or conversion price of $5.00 or more), divided by (ii) the number of fully diluted the Company capital stock (including Company Preferred Stock, warrants, stock options, convertible notes, and any other convertible securities) (excluding unvested options and options or warrants with an exercise or conversion price of $5.00 or more and assuming a conversion price of the Company subsidiary securities as provided in the Merger Agreement); divided by (b) $10.00 | |||||
Conversion of stock, amount | $ 250,000,000 | |||||
Net tangible assets | $ 5,000,001 | |||||
Lock-up shares, rate | 50% | |||||
Subsequent Event [Member] | Common Stock [Member] | Merger Agreement [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Share price, per share | $ / shares | $ 12.50 | |||||
Merger Consideration [Member] | Subsequent Event [Member] | Series F Cumulative Convertible Preferred Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, par value | $ / shares | 0.001 | |||||
Merger Consideration [Member] | Subsequent Event [Member] | Series A Convertible Preferred Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | |||||
Merger Consideration [Member] | Subsequent Event [Member] | Options And Warrants [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Equal amount | $ 250,000,000 | |||||
Merger Consideration [Member] | Subsequent Event [Member] | Viveon Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.0001 | |||||
Share price per share | $ / shares | $ 10 | |||||
Number of shares issued | $ 5,000,000 | |||||
Merger Consideration [Member] | Subsequent Event [Member] | Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.001 |