Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 17, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Rennova Health, Inc. | |
Entity Central Index Key | 931,059 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | RNVA | |
Entity Common Stock, Shares Outstanding | 5,639,669 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 41,019 | $ 75,017 |
Accounts receivable, net | 401,026 | 1,199,899 |
Prepaid expenses and other current assets | 146,713 | 149,385 |
Inventory | 73,732 | |
Income tax refunds receivable | 1,458,438 | 1,458,438 |
Current assets of AMSG classified as held for sale | 68,775 | 337,900 |
Total current assets | 2,189,703 | 3,220,639 |
Property and equipment, net | 3,090,047 | 3,043,590 |
Deposits | 157,461 | 141,402 |
Non-current assets of AMSG classified as held for sale | 928,722 | 76,762 |
Total assets | 6,365,933 | 6,482,393 |
Current liabilities: | ||
Accounts payable (includes related parties of $0.3 and $0.2 milion, respectively) | 4,296,213 | 2,928,524 |
Accrued expenses | 5,010,298 | 2,882,029 |
Income taxes payable | 490,436 | 942,433 |
Current portion of notes payable | 7,299,088 | 9,011,247 |
Current portion of notes payable, related party | 223,500 | 328,500 |
Current portion of capital lease obligations | 1,491,666 | 1,796,053 |
Current liabilities of AMSG classified as held for sale | 1,368,612 | 1,675,981 |
Total current liabilities | 20,179,813 | 19,564,767 |
Other liabilities: | ||
Debentures | 4,239,005 | |
Capital lease obligations, net of current portion | 735,538 | 1,774,121 |
Derivative liabilities | 2,803 | |
Non-current liabilities of AMSG classified as held for sale | 26,598 | |
Total liabilities | 25,154,356 | 21,368,289 |
Stockholders' deficit: | ||
Common stock, $0.01 par value, 500,000,000 shares authorized, 1,354,171 and 186,692 shares issued and outstanding | 13,542 | 1,867 |
Additional paid-in-capital | 126,335,119 | 45,752,999 |
Accumulated deficit | (145,154,586) | (60,640,864) |
Total stockholders' deficit | (18,788,423) | (14,885,896) |
Total liabilities and stockholders' deficit | 6,365,933 | 6,482,393 |
Series G Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 2 | 2 |
Series H Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | 100 | |
Series F Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred stock value | $ 17,500 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts payable related parties | $ 300,000 | $ 200,000 |
Preferred stock par value | $ 0.01 | |
Preferred stock shares authorized | 5,000,000 | |
Preferred stock shares outstanding | 1,750,275 | |
Common stock par value | $ 0.01 | $ 0.01 |
Common stock shares authorized | 500,000,000 | 500,000,000 |
Common stock shares issued | 1,354,171 | 186,692 |
Common stock shares outstanding | 1,354,171 | 186,692 |
Series G Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 14,000 | 14,000 |
Preferred stock shares issued | 215 | 215 |
Preferred stock shares outstanding | 215 | 215 |
Series H Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 14,202 | 14,202 |
Preferred stock shares issued | 60 | 10,019 |
Preferred stock shares outstanding | 60 | 10,019 |
Series F Preferred Stock [Member] | ||
Preferred stock par value | $ 0.01 | $ 0.01 |
Preferred stock shares authorized | 1,750,000 | 1,750,000 |
Preferred stock shares issued | 1,750,000 | 0 |
Preferred stock shares outstanding | 1,750,000 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net revenues | $ 1,414,211 | $ 41,362 | $ 3,312,476 | $ 4,067,562 |
Operating expenses: | ||||
Direct costs of revenue | 309,347 | 305,157 | 849,632 | 1,128,060 |
General and administrative | 5,169,478 | 6,497,718 | 12,978,349 | 17,142,263 |
Sales and marketing expenses | 170,028 | 415,976 | 620,560 | 1,441,322 |
Bad debt | 477,249 | 3,666,707 | 1,051,590 | 3,667,992 |
Depreciation and amortization | 451,597 | 680,579 | 1,508,042 | 2,037,910 |
Total operating expenses | 6,577,699 | 11,566,137 | 17,008,173 | 25,417,547 |
Loss from continuing operations before other income (expense) and income taxes | (5,163,488) | (11,524,775) | (13,695,697) | (21,349,985) |
Other income (expense): | ||||
Other income | 40,455 | 127,008 | 91,212 | 227,020 |
Change in fair value of derivative instruments | 1,827,112 | (42,702,815) | 6,553,772 | |
Gain (loss) on extinguishment of debt | 42,702,815 | |||
Loss on legal settlement | (17,654) | |||
Interest expense | (5,331,681) | (1,651,629) | (16,510,525) | (4,700,664) |
Total other income (expense), net | (5,291,226) | 302,491 | (16,419,313) | 2,062,474 |
Net loss from continuing operations before income taxes | (10,454,714) | (11,222,284) | (30,115,010) | (19,287,511) |
Provision for income taxes | 372 | 3,622 | ||
Net loss from continuing operations | (10,455,086) | (11,222,284) | (30,118,632) | (19,287,511) |
Net loss from discontinued operations | (370,151) | (787,155) | (1,053,471) | (2,828,030) |
Net loss | (10,825,237) | (12,009,439) | (31,172,103) | (22,115,541) |
Deemed dividend from trigger of down round provision feature | (2,280,280) | (53,341,619) | ||
Net loss to common shareholders | $ (13,105,517) | $ (12,009,439) | $ (84,513,722) | $ (22,115,541) |
Net loss per common share: | ||||
Basic and diluted: continuing operations | $ (10.59) | $ (122.24) | $ (112.12) | $ (368.16) |
Basic and diluted: discontinued operations | (0.31) | (8.57) | (1.54) | (53.98) |
Total Basic and diluted | $ (10.90) | $ (130.81) | $ (123.66) | $ (422.14) |
Weighted average number of common shares outstanding during the period: | ||||
Basic and diluted | 1,202,299 | 91,808 | 683,411 | 52,389 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders’ Deficit (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) | Series G Preferred Stock [Member] | Series H Preferred Stock [Member] | Series F Preferred Stock [Member] | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 2 | $ 100 | $ 102 | $ 1,867 | $ 45,752,999 | $ (60,640,864) | $ (14,885,896) | |
Balance, shares at Dec. 31, 2016 | 215 | 10,019 | 10,234 | 186,692 | ||||
Conversion of preferred stock into common stock | $ (78) | $ (78) | $ 3,704 | (3,627) | ||||
Conversion of preferred stock into common stock, shares | (7,785) | (7,785) | 370,446 | |||||
Preferred stock issued for business acquisition | $ 17,500 | $ 17,500 | 156,597 | 174,097 | ||||
Preferred stock issued for business acquisition, shares | 1,750,000 | 1,750,000 | ||||||
Common stock issued in exchange for warrants | $ 21 | 57,848 | 57,869 | |||||
Common stock issued in exchange for warrants, shares | 2,056 | |||||||
Shares issued in settlement of notes payable and warrants | $ 267 | 439,733 | 440,000 | |||||
Shares issued in settlement of notes payable and warrants, shares | 26,667 | |||||||
Exchange of preferred stock for convertible debentures | $ (22) | $ (22) | (2,173,978) | (2,174,000) | ||||
Exchange of preferred stock for convertible debentures, shares | (2,174) | (2,174) | ||||||
Conversion of debentures into common stock | $ 5,489 | 4,058,672 | 4,064,161 | |||||
Conversion of debentures into common stock, shares | 548,932 | |||||||
Rounding up of common shares in connection with reverse stock split | $ 5 | (5) | ||||||
Rounding up of common shares in connection with reverse stock split, shares | 526 | |||||||
Common stock granted to employees | $ 2 | (2) | ||||||
Common stock granted to employees, shares | 185 | |||||||
Discount on convertible debentures | 252,143 | 252,143 | ||||||
Warrants and benefical conversion features related to the issuance of convertible notes | 24,177,258 | 24,177,258 | ||||||
Stock-based compensation | 34,081 | 34,081 | ||||||
Deemed dividend from trigger of down round provision feature | 53,341,619 | (53,341,619) | ||||||
Restricted stock issued to employees | $ 1,819 | 81,145 | 82,964 | |||||
Restricted stock issued to employees, shares | 181,933 | |||||||
Common stock issued for services and severance | $ 417 | 160,586 | 161,003 | |||||
Common stock issued for services and severance, shares | 41,667 | |||||||
Shares returned to treasury | $ (49) | 49 | ||||||
Shares returned to treasury, shares | (4,933) | |||||||
Net loss | (31,172,103) | (31,172,103) | ||||||
Balance at Sep. 30, 2017 | $ 2 | $ 0 | $ 17,500 | $ 17,502 | $ 13,542 | $ 126,335,119 | $ (145,154,586) | $ (18,788,423) |
Balance, shares at Sep. 30, 2017 | 215 | 60 | 1,750,000 | 1,750,275 | 1,354,171 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows used in operating activities: | ||
Net loss from continuing operations | $ (30,118,632) | $ (19,287,511) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation and amortization | 1,508,042 | 2,037,910 |
Non-cash gain on derivative instruments | (6,653,774) | |
Stock issued for services | 161,003 | 9,310 |
Stock-based compensation | 34,081 | 884,165 |
Bad debt expense | 1,051,590 | 3,667,992 |
Non-cash interest expense | 8,441,043 | |
Amortization of debt discount | 6,228,352 | 2,474,497 |
Non-cash settlement of debt | (50,000) | |
Loss (gain) on extinguishment of debt | (42,702,815) | |
Change in fair value of derivative instrument | 42,702,815 | (6,553,772) |
Loss from discontinued operations | (1,053,471) | (2,828,030) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (252,717) | 1,878,086 |
Inventory | (73,732) | |
Prepaid expenses and other current assets | 2,672 | 236,612 |
Security deposits | (16,059) | 3,040 |
Accounts payable | 1,367,689 | (1,679,960) |
Accrued expenses | 2,081,876 | 331,797 |
Income tax assets and liabilities | (451,997) | 2,202,206 |
Net cash used in operating activities of continuing operations | (11,140,260) | (16,823,660) |
Net cash used in discontinued operations | (643,181) | (216,614) |
Net cash used in operating activities | (11,783,441) | (17,040,274) |
Cash flows provided by (used in) investing activities: | ||
Purchase of property and equipment | (1,554,499) | (15,998) |
Net cash used in investing activities of continuing operations | (1,554,499) | (15,998) |
Net cash provided by investing activites of discontinued operations | 1,936 | 79,271 |
Net cash provided by (used in) investing activities | (1,552,563) | 63,273 |
Cash flows provided by financing activities: | ||
Proceeds from the issuance of common stock and warrants, net of offering cost | 7,521,036 | |
Proceeds from issuance of related party notes payable and advances | 3,805,000 | 8,285,000 |
Proceeds from issuance of notes payable and debentures | 15,742,500 | 5,394,500 |
Payments on related party notes payable and advances | (3,860,000) | (6,000,000) |
Payments on notes payable | (1,042,524) | (5,715,000) |
Payments on capital lease obligations | (1,342,970) | (791,365) |
Net cash provided by financing activities of continuing operations | 13,302,006 | 8,694,171 |
Net cash used in financing activities of discontinued operations | (36,056) | |
Net cash provided by financing activities | 13,302,006 | 8,658,115 |
Net (decrease) in cash | (33,998) | (8,318,886) |
Cash at beginning of period | 75,017 | 8,833,230 |
Cash at end of period | $ 41,019 | $ 514,344 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Note 1 – Organization and Basis of Presentation Rennova Health, Inc. (“Rennova”), together with its subsidiaries (the “Company”, “we”, “us” or “our”), is a vertically integrated provider of healthcare related products and services. The Company’s principal lines of business are (i) clinical laboratory operations; (ii) supportive software solutions to healthcare providers including Electronic Health Records (“EHR”), Medical Billing Services and Laboratory Information Services; and (iii) the recent addition of a rural critical access hospital. Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the 2016 audited financial statements included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 10, 2017. These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC, and therefore omit or condense certain footnotes and other information normally included in consolidated interim financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All material intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) considered necessary for the fair presentation of the financial position and results of operations and cash flows for the interim periods reported herein. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year. During the three and nine months ended September 30, 2017 and 2016, comprehensive loss was equal to the net loss amounts presented in the accompanying condensed consolidated statements of operations. In addition, certain prior year balances have been reclassified to conform to the current presentation. Reclassification The Company has reclassified certain amounts in the 2016 condensed consolidated financial statements to be consistent with the 2017 presentation. These principally relate to classification of certain revenues, cost of revenues and related segment data, as well as balance sheet classifications to assets and liabilities held for sale. Reclassifications relating to the discontinued operations of AMSG are described further in Note 14. The reclassifications had no impact on operations or cash flows for the three and nine months ended September 30, 2016. Reverse Stock Splits On February 7, 2017, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-30 reverse stock split of the Company’s shares of common stock effective on February 22, 2017 and on September 21, 2017, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-15 reverse stock split effective October 5, 2017 (the “Reverse Stock Splits”). The stockholders of the Company had approved these amendments to the Company’s Certificate of Incorporation on December 22, 2016 for the February 7, 2017 reverse stock split and on September 20, 2017 for the October 5, 2017 reverse stock split. In both cases, the Company’s stockholders had granted authorization to the Board of Directors to determine in its discretion the specific ratio, subject to limitations, and the timing of the reverse splits within certain specified effective dates. As a result of the Reverse Stock Splits, every 30 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock, par value $0.01 per share, on February 7, 2017 and every 15 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock, par value $0.01 per share, on October 5, 2017. In addition, the conversions and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants, stock options, restricted stock, equity incentive plans and convertible notes payable were proportionately adjusted at the 1:30 reverse split ratio and again at the 1:15 reverse split ratio in accordance with the terms of such instruments. In addition, proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Splits, other than as a result of the rounding up of fractional shares in the February reverse split and the payment of cash in lieu of fractional shares in the October reverse split, as no fractional shares were issued in connection with the Reverse Stock Splits. The par value and other terms of the common stock were not affected by the Reverse Stock Splits. The authorized capital of the Company of 500,000,000 shares of common stock and 5,000,000 shares of preferred stock were also unaffected by the Reverse Stock Splits. All share, per share and capital stock amounts for all periods presented have been restated to give effect to the Reverse Stock Splits. Adoption of ASU 2017-11 In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-11 “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. Under current GAAP, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date. The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated. For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update. Those amendments in Part 1 of this Update are a cost savings relative to current GAAP. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period. The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective; or 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company has determined that this amendment had a material impact on its condensed consolidated financial statements and has early adopted this accounting standard update. The cumulative effect of the adoption of ASU 2017-11 resulted in the reclassification of the derivative liability recorded of $56 million and the reversal of $41 million of interest expense recorded in the Company’s first fiscal quarter of 2017. The remaining $16 million was offset to additional paid in capital (discount on convertible debenture). Additionally, the Company recognized a deemed dividend from the trigger of the down round provision feature of $53.3 million. A $51 million deemed dividend was recorded retrospectively as of the beginning of the issuance of the March 2017 debentures where the initial derivative liability was recorded. A $2.3 million deemed dividend adjustment was recorded in the three months ended September 30, 2017 as a result of the down round provision feature. Going Concern The Company’s condensed consolidated financial statements are prepared using U.S. GAAP applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has accumulated significant losses and has negative cash flows from operations, and at September 30, 2017 had a working capital deficit and stockholders’ deficit of $18.0 million and $18.8 million, respectively, which raise substantial doubt about its ability to continue as a going concern. In addition, the Company’s cash position as of the date of this report is critically deficient, critical payments are not being made in the ordinary course of business and certain indebtedness in the amount of $6.0 million matured on March 31, 2017, which the Company does not have the financial resources to satisfy (see Note 5), all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company continues to consider efficiencies and is currently using one laboratory for the majority of its toxicology diagnostics thereby reducing the number of employees and associated operating expenses, in order to reduce costs. In addition, the Company received approximately $15.7 million in cash from the issuances of debentures and warrants in the first nine months of 2017 (see Note 6), $3.8 million from related parties and an additional $4.0 million of proceeds on October 30, 2017 from the issuance of convertible preferred stock (see Note 15). In July 2017, the Company announced that it plans to spin off its Advanced Molecular Services Group (“AMSG”) as an independent publicly traded company by way of a tax-free distribution to its shareholders. Completion of the spinoff of AMSG is expected to occur during the first quarter of 2018, and is subject to numerous conditions, including effectiveness of a Registration Statement on Form 10 to be filed with the Securities and Exchange Commission and consents, including under various funding agreements previously entered into by the Company. The intent of the spinoff of AMSG is to create two public companies, each of which can focus on its own strengths and operational plans. In accordance with ASC 205-20 and having met the criteria for “held for sale”, the Company has reflected amounts relating to AMSG as a disposal group classified as held for sale and included as part of discontinued operations. AMSG is no longer included in the segment reporting following the reclassification to discontinued operations. The discontinued operations of AMSG are described further in Note 14. The Company also announced that the Big South Fork Medical Center received CMS regional office licensure approval and opened its doors on August 8, 2017. The hospital provided services to over 1,854 patients and recognized approximately $0.6 million of revenues during the three months ended September 30, 2017. The Company may amend its current revenue recognition policy and percentage for the hospital when payments are received to support amended revenue recognition methodologies. Therefore, the Company expects that the opening of the hospital will continue to provide additional revenue and cash flow sources. There can be no assurance that the Company will be able to achieve its business plan, raise any additional capital or secure the additional financing necessary to implement its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to significantly reduce its operating costs, increase its revenues and eventually regain profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Recent Events Common Stock Listing Effective October 25, 2017, the Company’s common stock (RNVA) and warrants to purchase common stock (RNVAW) were no longer listed on the Nasdaq Stock Market but began trading on the OTCQB instead, as more fully discussed in Note 15. Financing Agreements On October 30, 2017, the Company issued its Series I-1 Convertible Preferred Stock, and modified the anti-dilution provisions of certain outstanding debentures and warrants that were issued in March 2017, as more fully discussed in Note 15. |
Accounts Receivable
Accounts Receivable | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Accounts Receivable | Note 2 – Accounts Receivable Accounts receivable at September 30, 2017 (unaudited) and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Accounts receivable - laboratory services $ 4,118,407 $ 12,715,835 Accounts receivable - hospital 2,982,771 - Accounts receivable - all others 528,196 499,508 Total accounts receivable 7,629,374 13,215,343 Less: Allowance for discounts (3,583,014 ) (11,664,490 ) Allowance for discounts - hospital (2,368,565 ) - Allowance for bad debts (1,276,769 ) (350,954 ) Accounts receivable, net $ 401,026 $ 1,199,899 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 3 – Property and Equipment Property and equipment at September 30, 2017 (unaudited) and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Medical equipment $ 713,799 $ 696,195 Building 1,359,484 - Equipment 461,912 461,912 Equipment under capital leases 4,497,025 4,497,025 Furniture 408,101 377,630 Leasehold improvements 1,333,385 1,329,387 Vehicles 196,534 196,534 Computer equipment 587,742 564,742 Software 1,859,289 1,739,348 11,417,271 9,862,773 Less accumulated depreciation (8,327,224 ) (6,819,183 ) Property and equipment, net $ 3,090,047 $ 3,043,590 On January 13, 2017, the Company completed an asset purchase agreement to acquire certain assets related to Scott County Community Hospital, based in Oneida, Tennessee (the “Hospital Assets”). The Hospital Assets include a 52,000 square foot hospital building and 6,300 square foot professional building on approximately 4.3 acres. Scott County Community Hospital, which has since been renamed as Big South Fork Medical Center, is classified as a Critical Access Hospital (rural). The Company acquired the Hospital Assets out of bankruptcy for a purchase price of $1.0 million, and the purchase price has been recorded as property and equipment in the Company’s condensed consolidated balance sheet. The Company opened the hospital on August 8, 2017. Depreciation expense on property and equipment was $0.5 million and $0.7 million for the three months ended September 30, 2017 and 2016, and $1.5 million and $2.0 million for the nine months ended September 30, 2017 and 2016, respectively. Management periodically reviews the valuation of long-lived assets, including property and equipment, for potential impairment. Management did not recognize any impairment of these assets during the nine months ended September 30, 2017 and 2016. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Note 4 – Accrued Expenses Accrued expenses at September 30, 2017 (unaudited) and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Commisions payable $ 29,860 $ 44,788 Accrued payroll and related liabilities 1,755,131 493,521 Accrued interest 2,211,588 1,471,191 Other accrued expenses 1,013,719 872,529 Total accrued expenses $ 5,010,298 $ 2,882,029 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 5 – Notes Payable The Company and its subsidiaries are party to a number of loans with affiliates and unrelated parties. At September 30, 2017 (unaudited) and December 31, 2016, notes payable consisted of the following: Notes Payable – Third Parties September 30, 2017 December 31, 2016 Loan payable under prepaid forward purchase contract $ 5,000,000 $ 5,000,000 Loan payable to TCA Global Master Fund, LP ("TCA") in the original principal amount of $3 million at 16% interest (the "TCA Debenture"). Principal and interest payments due in various installments through December 31, 2017. 1,957,476 3,000,000 Notes payable to CommerceNet and Jay Tenenbaum in the original principal amount of $500,000, bearing interest at 6% per annum (the "Tegal Notes"). Prinicpal and interest payments are due annually from July 12, 2015 through July 12, 2017 341,612 341,612 Other convertible notes payable - 440,000 Unamortized discount on other convertible notes - (179,889 ) Derivative liability associated with the TCA Debenture, at fair value - 409,524 7,299,088 9,011,247 Less current portion (7,299,088 ) (9,011,247 ) Notes payable - third parties, net of current portion $ - $ - On March 31, 2016, the Company entered into an agreement to pledge certain of its accounts receivable as collateral against a prepaid forward purchase contract whereby the Company received consideration in the amount of $5.0 million. The receivables had an estimated collectable value of $8.7 million which had been adjusted down to approximately $1.5 million on the Company’s balance sheet as of December 31, 2016 and $0 as of September 30, 2017. In exchange for the consideration received, the counterparty received the right to: (i) a 20% per annum investment return from the Company on the consideration, with a minimum repayment term of six months and minimum return of $0.5 million, (ii) all payments recovered from the accounts receivable up to $5.25 million, if paid in full within six months, or $5.5 million, if not paid in full within six months, and (iii) 20% of all payments of the accounts receivable in excess of amounts received in (i) and (ii). On March 31, 2017, to the extent that the counterparty has not been paid $6.0 million, the Company was required to pay the difference, plus 30% interest per annum on the total balance. To date, the Company has not recovered any payments against the accounts receivable. As of September 30, 2017, the Company has accrued $1.9 million for the counterparty’s required investment return, which is reflected in accrued expenses in the accompanying condensed consolidated balance sheet, and $6.9 million was due to the counterparty on September 30, 2017. The Company does not have the financial resources to repay this obligation. The Company did not make the required monthly principal and interest payments due under the TCA Debenture for the period from October 2016 through March 2017. On February 2, 2017, the Company made a payment to TCA in the amount of $0.4 million which was applied to accrued and unpaid interest and fees, including default interest, as of the date of payment. On March 21, 2017, the Company made a payment to TCA in the amount of $0.75 million, of which approximately $0.1 million was applied to accrued and unpaid interest and fees in accordance with the terms of the TCA Debenture. Also on March 21, 2017, the Company entered into a letter agreement with TCA, which (i) waived any payment defaults through March 21, 2017; (ii) provided for the $0.75 million payment discussed above; (iii) set forth a revised repayment schedule whereby the remaining principal plus interest aggregating to approximately $2.6 million was to be repaid in various monthly installments from April of 2017 through September of 2017; and (iv) provided for payment of an additional service fee in the amount of $150,000, which was due on June 27, 2017, the day after effective date of the registration statement filed by the Company; which amount is reflected in accrued expenses in the accompanying condensed consolidated balance sheet at September 30, 2017. In addition, TCA entered into an intercreditor agreement with the purchasers of the convertible debentures (see Note 6) which sets forth rights, preferences and priorities with respect to the security interests in the Company’s assets. On September 19, 2017, the Company entered into a new agreement with TCA, which extended the repayment schedule through to December 31, 2017. The Company is current with its payments. On September 15, 2016, the Company entered into an agreement with two investors whereby the Company sold to the investors convertible notes in the aggregate principal amount of $0.4 million (the “September 2016 Notes”). The September 2016 Notes were convertible into shares of the Company’s common stock at a conversion price of $112.50 per share. In conjunction with the sale of the September 2016 Notes, the Company issued warrants to purchase an aggregate of 4,444 shares of the Company’s common stock at an exercise price of $180.00 per share. Based on the allocation of the net proceeds from the September 2016 Notes to the fair value of the warrants, and the resulting beneficial conversion features, the Company recognized a discount for the entire face value of the September 2016 Notes, which was accreted through the notes’ maturity date of March 15, 2017. On March 13, 2017, the September 2016 Notes, along with the accompanying warrants, were exchanged for 26,667 shares of the Company’s common stock. The Company did not make the principal payments under the Tegal Notes that were due on July 12, 2016. On November 3, 2016, the Company received a default notice from the holders of the Tegal Notes demanding immediate repayment of the outstanding principal and accrued interest aggregating to $0.4 million. On December 7, 2016 the Company received a breach of contract complaint with a request for entry of a default judgment (see Note 11). To date, the Company has yet to repay this amount. Notes Payable – Related Parties September 30, 2017 December 31, 2016 Loan payable to Alcimede LLC, bearing interest at 6% per annum, with all principal and interest due on February 2, 2018 $ 168,500 $ 218,500 Other advances from related parties 55,000 110,000 223,500 328,500 Less current portion (223,500 ) (328,500 ) Total notes payable - related parties, net of current portion $ - $ - On February 3, 2015, the Company borrowed $3.0 million from Alcimede LLC (“Alcimede”). Seamus Lagan, the Company’s President and Chief Executive Officer, is the sole manager of Alcimede. The note has an interest rate of 6% and was originally due on February 2, 2016. Alcimede later agreed to extend the maturity date of the loan to August 2, 2017. On June 29, 2015, Alcimede exercised options granted in October 2012 to purchase 66,667 shares of the Company’s common stock at an exercise price of $37.50 per share, and the loan outstanding was reduced in satisfaction of the aggregate exercise price of $2.5 million. In August of 2016, $0.3 million was repaid by the Company through the issuance of shares of common stock. In March of 2017, the Company and Mr. Lagan agreed that a payment made to Alcimede in the amount of $50,000 would be deducted from the outstanding balance of the note. On August 2, 2017, the Company and Alcimede agreed to further extend the maturity date of the loan to February 2, 2018. The remaining balance due on this loan as of September 30, 2017 was $0.2 million, including accrued interest. During the nine months ended September 30, 2017, the Company repaid $0.1 million that was outstanding to a former principal stockholder, and borrowed an additional $75,000 from this same stockholder of which $50,000 has been repaid and $3.6 million from Mr. Diamantis, a director of the Company, which has been fully repaid (see Note 7). |
Debentures
Debentures | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debentures | Note 6 – Debentures The carrying amount of all outstanding debentures as of September 30, 2017 (unaudited) is as follows: September 30, 2017 Debentures $ 20,962,234 Discount on Debentures (16,398,666 ) Deferred financing fees (324,563 ) 4,239,005 Less current portion - Debentures $ 4,239,005 There were no debentures outstanding as of December 31, 2016. February Offering On February 2, 2017, the Company issued $1.6 million aggregate principal amount of Original Issue Discount Convertible Debentures due three months from the date of issuance (the “February Debentures”) and warrants to purchase an aggregate of 6,667 shares of common stock, which can be exercised at any time after August 17, 2017 at an exercise price of $38.70 per share (the “February Warrants”), to an accredited investor for a purchase price of $1.5 million. On March 21, 2017, the February Debentures were exchanged for $2.5 million of exchange debentures as more fully discussed below. March Offerings On March 21, 2017, the Company issued $10.85 million aggregate principal amount of Senior Secured Original Issue Discount Convertible Debentures due March 21, 2019 (the “Convertible Debentures”). The Company received net proceeds from this transaction in the approximate amount of $8.4 million. The Company used $3.8 million of the net proceeds to repay the 2017 Diamantis Note (see Note 7) and $0.75 million of the net proceeds to make the partial repayment on the TCA Debenture (see Note 5). The remainder of the net proceeds were used for general corporate purposes. In conjunction with the issuance of the Convertible Debentures, the holder of the February Debentures exchanged these debentures for $2.5 million of new debentures (the “Exchange Debentures” and, collectively with the Convertible Debentures, the “March Debentures”) on the same terms as, and pari passu with, the Convertible Debentures and warrants. The Company recorded non-cash interest expense in the amount of $0.4 million as a result of this exchange. Additionally, the holders of an aggregate of $2.2 million stated value of the Company’s Series H Convertible Preferred Stock (the “Series H Preferred Stock”) exchanged such preferred stock into $2.7 million principal amount of Exchange Debentures and warrants. The March Debentures contain a 24% original issue discount, have no regularly scheduled interest payments except in the event of a default and have a maturity date of March 21, 2019. In connection with the March Debentures the Company issued warrants to purchase an aggregate of 9,166,616 shares of the Company’s common stock to several accredited investors. The warrants were issued to the investors in three tranches, Series A Warrants, Series B Warrants and Series C Warrants (collectively, the “March Warrants”). The Series A Warrants are exercisable for 3,214,911 shares of the Company’s common stock. They are immediately exercisable and have a term of exercise equal to five years. The Series B Warrants are exercisable for 2,736,794 shares of the Company’s common stock and are exercisable for a period of 18 months commencing immediately. The Series C Warrants are exercisable for 3,214,911 shares of the Company’s common stock and have a term of five years provided such warrants shall only vest if, when and to the extent that the holders exercise the Series B Warrants. At September 30, 2017, the Series A, Series B and Series C Warrants each have an exercise price of $5.85 per share, which reflects an adjustment pursuant to their terms. The Series A, Series B and Series C Warrants are subject to “full ratchet” and other customary anti-dilution protections. The March Debentures are convertible into shares of the Company’s common stock, at a conversion price which has been adjusted pursuant to the terms of the March Debentures to $5.85 per share as of September 30, 2017, due to prices at which the Company has subsequently issued shares of common stock. The Convertible Debentures began to amortize monthly commencing on the 90th day following the closing date. The Exchange Debentures began to amortize monthly on the closing date. On each monthly amortization date, the Company may elect to repay 5% of the original principal amount of the March Debentures in cash or, in lieu thereof, the conversion price of such debentures will thereafter be 85% of the volume weighted average price at the time of conversion. In the event the Company does not elect to pay such amortization amounts in cash, each investor, in their sole discretion, may increase the conversion amount subject to the alternative conversion price by up to four times the amortization amount. The March Debentures contain customary affirmative and negative covenants. The conversion prices are subject to reset in the event of offerings or other issuances of common stock, or rights to purchase common stock, at a price below the then conversion price, as well as other customary anti-dilution protections as more fully described in the debentures. The March Debentures are secured by all of the Company’s assets and are guaranteed by substantially all of the Company’s subsidiaries. Between March 22, 2017 and September 30, 2017, holders of the March Debentures converted an aggregate of $4.1 million of these debentures into 548,932 shares of common stock. The exercise prices of the March Warrants issued in connection with the March Debentures are subject to reset in the event of offerings or other issuances of common stock, or rights to purchase common stock, at a price below the then exercise price, as well as other customary anti-dilution protections. As a result of these provisions, both the March Debentures and the March Warrants were deemed to be not indexed to the Company’s common stock, and the Company recognized derivative liabilities for the embedded conversion feature of the March Debentures and the March Warrants in the original amount of $15.3 million and $41.3 million, respectively. The Company recognized a discount for 100% of the principal value of the March Debentures and non-cash interest expense in the amount of $43.7 million in connection with the recognition of these derivative liabilities. As a result of the adoption of ASU 2017-11 in the second quarter of 2017, the interest expense and derivative liability originally recognized were adjusted and extinguished during the three months ended June 30, 2017. See Note 1 for the adoption of ASU 2017-11 for the retrospective adjustments made to the Company’s condensed consolidated financial statements with respect to the derivative liabilities associated with these debentures and warrants. June Offerings In June 2017, the Company issued debentures due three months from the date of issuance in two issuances (collectively, the “June Debentures”) and warrants to purchase an aggregate of 100,000 shares of common stock (33,333 warrants in the June 2, 2017 transaction and 66,667 in the June 22, 2017 transaction), which can be exercised at any time after nine months at an exercise price of $5.85 per share for the June 2, 2017 warrants and $5.70 per share for the June 22, 2017 warrants (collectively the “June Warrants”), to accredited investors for a purchase price of $1,902,700 and proceeds to the Company of $1.5 million. The Company recorded a discount on the debentures of $107,700 which has been fully amortized . . July Offerings On July 17, 2017, the Company closed an offering of $4,136,862 aggregate principal amount of Original Issue Discount Debentures due October 17, 2017 (the “July Debentures”) and warrants to purchase an aggregate of 141,333 shares of common stock (the “July Warrants”) for consideration of $2,000,000 in cash and the exchange of the full $1,902,700 aggregate principal amount of the June Debentures. Under the Purchase Agreement, the Company was required to hold a stockholders’ meeting to obtain stockholder approval for at least a 1-for-8 reverse split of the Company’s common stock on or before September 20, 2017. Accordingly, the Company’s stockholders approved a reverse stock split on September 20, 2017 and the Company effected a 1-for-15 reverse stock split of its common stock on October 5, 2017, as further discussed in Note 1. The July Debentures were guaranteed by substantially all of the subsidiaries of the Company pursuant to a Subsidiary Guarantee in favor of the holders of the July Debentures. As more fully discussed below, on September 19, 2017, the July Debentures were exchanged for $6.4 million of exchange debentures. The July Warrants are exercisable into shares of the Company’s common stock at any time from and after six months from the closing date at an exercise price of $5.63 per common share (subject to adjustment). The July Warrants will terminate five years after they become exercisable. September Offerings On September 19, 2017, the Company closed an offering of $2,604,000 principal amount of Senior Secured Original Issue Discount Convertible Debentures due September 19, 2019 (the “New Debentures”) and three series of warrants to purchase an aggregate of 6,935,517 shares of the Company’s common stock (the “Series A Warrants,” the “Series B Warrants,” and the “Series C Warrants,” and collectively, the “September Warrants”). The offering was pursuant to the terms of a Securities Purchase Agreement, dated as of August 31, 2017 (the “Purchase Agreement”), between the Company and certain existing institutional investors of the Company. The Company received proceeds of $2,100,000 from the offering. Also on September 19, 2017, the Company closed exchanges by which the holders of the Company’s July Debentures exchanged $4,136,862 principal amount of such debentures for $6,412,136 principal amount of new debentures on the same items as, and pari passu with, the New Debentures (the “September Exchange Debentures” and, together with the New Debentures, the “September Debentures”). The Company recorded non-cash interest expense in the amount of $1.0 million as a result of this exchange. All issuance amounts of the September Debentures reflect a 24% original issue discount. The September Debentures contain customary affirmative and negative covenants. The conversion price is subject to “full ratchet” and other customary anti-dilution protections as more fully described in the debentures. The September Debentures may be converted at any time into shares of the Company’s common stock. The September Debentures begin to amortize monthly commencing on October 1, 2017. For the first three amortization dates, the amortization amount is $100,000. Thereafter, on each monthly amortization date, the Company may elect to repay 5% of the original principal amount of September Debentures in cash or, in lieu thereof, the conversion price of such September Debentures shall thereafter be 85% of the volume weighted average price at the time of conversion. In the event the Company does not elect to pay such amortization amounts in cash, each investor, in their sole discretion, may increase the conversion amount subject to the alternative conversion price by up to four times the amortization amount. The Series A Warrants are exercisable for an aggregate of 2,311,829 shares of the Company’s common stock. They are immediately exercisable and have a term of exercise equal to five years. The Series B Warrants are exercisable for an aggregate of 2,311,859 shares of the Company’s common stock and are exercisable for a period of 18 months commencing immediately. The Series C Warrants are exercisable for an aggregate of 2,311,829 shares of the Company’s common stock, and have a term of five years provided such Series C Warrants shall only vest if, when and to the extent that the holders exercise the Series B Warrants. The September Warrants each have an exercise price of $3.90. All of the September Warrants are subject to “full ratchet” and other customary anti-dilution protections. The Company’s obligations under the September Debentures are secured by a security interest in all of the Company’s and its subsidiaries’ assets, pursuant to the terms of the Security Agreement, dated as of March 20, 2017. During the nine months ended September 30, 2017, the Company realized approximately $15.7 million in proceeds from the issuances of these debentures and warrants. At September 30, 2017, the unamortized discounts were $16.4 million. These discounts represent original issue discounts, the relative fair value of the warrants issued with the debentures and the relative fair value of the beneficial conversion features of the debentures. During the three and nine months ended September 30, 2017, the Company recorded approximately $4.8 million and approximately $14.7 million of non-cash interest and amortization of debt discount expense primarily in connection with the debentures and warrants. See Note 9 for summarized information related to warrants issued and the activity during the nine months ended September 30, 2017. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 7 – Related Party Transactions In addition to the transactions discussed in Note 5, the Company had the following related party transactions during the nine months ended September 30, 2017 and 2016: In January and February of 2017, the Company received advances aggregating $3.6 million from Christopher Diamantis, a director of the Company. The advances, along with $0.5 million of previously accrued but unpaid interest, were due on demand, bearing interest at 10% per annum. The Company used the advances to pay the purchase price for the Hospital Assets and for general corporate purposes. On March 7, 2017, the Company issued a promissory note to Mr. Diamantis in the amount of $3.8 million (the “2017 Diamantis Note”) in connection with these advances received in 2017, plus accrued and unpaid interest of $0.5 million. In conjunction with the issuance of the 2017 Diamantis Note, the Company also issued to Mr. Diamantis warrants to purchase 27,667 shares of the Company’s common stock, exercisable at $15.00. The 2017 Diamantis Note was repaid on March 21, 2017 with the proceeds received from the issuance of the Convertible Debentures (see Note 6). In May and June of 2017, the Company received advances from Mr. Diamantis, net of repayments totaling $0.2 million, at a 10% annum interest rate, which amount was paid in full on July 18, 2017. Alcimede billed the Company $0.4 million and $0.3 million for consulting fees pursuant to a consulting agreement for each of the nine months ended September 30, 2017 and 2016, respectively. Monarch Capital, LLC (“Monarch”) billed the Company for consulting fees pursuant to a consulting agreement in the amount of $0.1 million for the nine months ended September 30, 2017 and 2016, respectively. The agreement expired on August 31, 2017. Michael Goldberg, a director of the Company up until his resignation effective April 24, 2017, is the Managing Director of Monarch. |
Capital Lease Obligations
Capital Lease Obligations | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Capital Lease Obligations | Note 8 – Capital Lease Obligations The Company leases various assets under capital leases expiring through 2020 as follows. At September 30, 2017 (unaudited) and December 31, 2016, capital lease obligations consisted of the following: September 30, 2017 December 31, 2016 Medical equipment $ 4,497,025 $ 4,497,025 Less accumulated depreciation (3,582,631 ) (2,809,511 ) Net $ 914,394 $ 1,687,514 Aggregate future minimum rentals under capital leases are as follows: Year ended December 31, 2017 (October through December) $ 493,282 2018 1,427,375 2019 377,919 2020 32,611 Total 2,331,187 Less interest 103,983 Present value of minimum lease payments 2,227,204 Less current portion of capital lease obligations 1,491,666 Capital lease obligations, net of current portion $ 735,538 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9 – Stockholders’ Equity Preferred Stock The Company has 5,000,000 shares, par value $0.01, of preferred stock authorized. As of September 30, 2017, the Company had outstanding 1,750,275 shares of preferred stock consisting of 215 shares of its Series G Preferred Stock, 60 shares of its Series H Preferred Stock and 1,750,000 shares of its Series F Convertible Preferred Stock (the “Series F Preferred Stock”). During the nine months ended September 30, 2017, 7,785 shares of Series H Preferred Stock were converted into 370,446 shares of common stock in accordance with the terms of the Series H Preferred Stock. Also during the nine months ended September 30, 2017, 2,174 shares of Series H Preferred Stock with a stated value of $2.2 million were exchanged for Exchange Debentures with an aggregate principal amount of $2.7 million and warrants (see Note 6). In connection with the acquisition of Genomas, Inc., on September 27, 2017, which is more fully discussed in Note 14, the Company issued 1,750,000 shares of its Series F Preferred Stock valued at $174,097. The following is a summary of certain terms and provisions of the Company’s Series F Preferred Stock: Rank Conversion Liquidation Preference Voting Rights Dividends Redemption Negative Covenants Preferred Stock Issued Subsequent to September 30, 2017 In October 2017, the Company issued its Series I-1 Convertible Preferred Stock in connection with a financing as more fully discussed in Note 15. Common Stock The Company had 1,354,171 and 186,692 shares of common stock outstanding at September 30, 2017 and December 31, 2016, respectively. The Company issued 1,167,479 shares of its common stock during the nine months ended September 30, 2017 as follows: The February 22, 2017 reverse stock split, which is more fully described in Note 1, resulted in the issuance of 526 shares of common stock due to the rounding up of fractional shares. On March 13, 2017, the Company issued 26,667 shares of common stock in settlement of $0.4 million of outstanding notes and warrants (see Note 5). On March 15, 2017, the Company agreed to issue 2,056 shares of common stock to the holders of a like number of warrants to purchase the Company’s common stock in exchange for the warrants valued at $57,868. During the nine months ended September 30, 2017, the Company issued 548,932 shares of its common stock upon conversion of $4.1 million of the principal amount of the March Debentures (See Note 6). On July 25, 2017, the Company issued 8,333 shares of its common stock valued at $42,510 for severance owed to a former employee under the terms of the Company’s equity plan. The equity plan is more fully described below. On August 14, 2017, the Company issued 181,933 shares of restricted stock to employees and directors, and later returned 4,933 shares of this stock to treasury, as more fully discussed under the heading Restricted Stock On August 23, 2017, the Company issued 33,334 shares of its common stock in payment of professional service fees valued at $118,493. Restricted Stock On August 14, 2017, the Board of Directors, based on the recommendation of the Compensation Committee of the Board and in accordance with the provisions of the 2007 Equity Plan, approved grants to employees and directors of the Company of an aggregate of 181,933 shares of restricted common stock of the Company. The grants fully vest on the first anniversary of the date of grant, subject to the grantee’s continued status as an employee or director, as the case may be, on the vesting date. During the nine months ended September 30, 2017, 4,933 shares of the restricted stock were forfeited by their terms and returned to treasury and cancelled. During the nine months ended September 30, 2017, the Company recognized stock-based compensation in the amount of $82,974 for the grant of the restricted stock based on a valuation of $3.75 per share. At September 30, 2017, the Company had approximately $580,750 of unrecognized compensation cost related to the restricted stock. Stock Options The Company maintained and sponsored the Tegal Corporation 2007 Incentive Award Equity Plan (the “2007 Equity Plan”). Tegal Corporation is the predecessor entity to the Company. The 2007 Equity Plan, as amended, provided for the issuance of stock options and other equity awards to the Company’s officers, directors, employees and consultants. During the nine months ended September 30, 2017 and 2016, the Company recognized stock-based compensation in the amount of $34,081 and $0.7 million, respectively, for the vesting of outstanding stock options. The 2007 Equity Plan terminated pursuant to its terms in September 2017. The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2017: Number of options Weighted- average exercise price Weighted- average contractual term (Yrs.) Outstanding at December 31, 2016 47,268 $ 1,941.45 8.93 Granted - - Expired - - Forfeit (8,790 ) - Exercised - - Outstanding at September 30, 2017 38,478 $ 2,072.75 8.68 Exercisable at September 30, 2017 31,811 $ 2,445.84 As of September 30, 2017, the Company had approximately $155,582 of unrecognized compensation cost related to stock options granted under the Company’s 2007 Equity Plan, which is expected to be recognized over a weighted-average period of 1.03 years. Warrants The Company, as part of various debt and equity financing transactions, has issued warrants to purchase shares of the Company’s common stock. The following summarizes the information related to warrants issued and the activity during the nine months ended September 30, 2017: Number of warrants Weighted average exercise price Balance at December 31, 2016 93,843 $ 175.50 Warrants issued during the period 17,900,999 $ 4.58 Warrants exchanged/exercised during period (6,500 ) Warrants expired during the period - Balance at September 30, 2017 17,988,342 $ 5.40 During the nine-months ended September 31, 2017, the Company issued 16,350,132 warrants with a weighted average exercise price of $5.03 per share in connection with the issuances of debentures as more fully discussed in Note 6. Basic and Diluted Loss per Share Basic loss per share excludes dilution and is computed by dividing loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. For the three and nine months ended September 30, 2017 and 2016, basic loss per share is the same as diluted loss per share. Diluted loss per share excludes all dilutive potential shares if their effect is anti-dilutive. As of September 30, 2017 and 2016, the following potential common stock equivalents were excluded from the calculation of diluted loss per share as their effect was anti-dilutive: As of September 30, 2017 2016 Warrants 17,988,342 78,102 Convertible preferred stock 71,147 47,463 Convertible debt 4,353,898 3,911 Stock options 38,478 49,331 22,451,865 178,807 |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | Note 10 – Supplemental Disclosure of Cash Flow Information The supplemental cash flow information for the nine months ended September 30, 2017 and 2016 (unaudited) is as follows: Nine Months Ended September 30, 2017 2016 Cash paid for interest $ 1,106,835 $ 1,237,622 Cash paid for income taxes $ 506,313 $ - Non-cash investing and financing activities: Services and severance settled through issuance of common stock $ 161,003 $ 2,131,829 Exchange of convertible debentures for convertible debentures and warrants $ 10,734,336 $ - Series F Preferred Stock issued for business acquisition $ 174,097 $ - Note payable and warrants settled through issuance of common stock $ 440,000 $ - Convertible debenture issued in exchange of Series H Preferred Stock $ 2,695,760 $ - Debentures converted into common stock $ 4,064,162 $ - Deemed dividend for trigger of down round provision feature $ 53,341,619 $ - |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 – Commitments and Contingencies Legal Matters From time to time, the Company may be involved in a variety of claims, lawsuits, investigations and proceedings related to contractual disputes, employment matters, regulatory and compliance matters, intellectual property rights and other litigation arising in the ordinary course of business. The Company operates in a highly regulated industry which may inherently lend itself to legal matters. Management is aware that litigation has associated costs and that results of adverse litigation verdicts could have a material effect on the Company’s financial position or results of operations. Management, in consultation with legal counsel, has addressed known assertions and predicted unasserted claims below. Biohealth Medical Laboratory, Inc, and PB Laboratories, LLC (the “Companies”) filed suit against CIGNA Health in 2015 alleging that CIGNA failed to pay claims for laboratory services the Companies provided to patients pursuant to CIGNA - issued and CIGNA - administered plans. In 2016, the U.S. District Court dismissed part of the Companies’ claims for lack of standing. The Companies appealed that decision to the Eleventh Circuit Court of Appeals, which recently reversed the District Court’s decision and found that the Companies have standing to raise claims arising out of traditional insurance plans as well as self-funded plans. The Company’s Epinex Diagnostics Laboratories, Inc. subsidiary was sued in a California state court by two former employees who alleged that they were wrongfully terminated, as well as for a variety of unpaid wage claims. The parties entered into a settlement agreement of this matter on July 29, 2016 for approximately $0.2 million, and the settlement was consummated on August 25, 2016. In October of 2016, the plaintiffs in this matter filed a motion with the court seeking payment for attorneys’ fees in the approximate amount of $0.7 million. On March 24, 2017, the court granted plaintiffs’ motion for payment of attorneys’ fees in the amount of $0.3 million, and the Company has accrued this amount in its condensed consolidated financial statements. Additionally, the Company is seeking indemnification for these amounts from Epinex Diagnostics, Inc. (“EDI”), the seller of Epinex Diagnostic Laboratories, Inc. (“EDL”), pursuant to a Stock Purchase Agreement entered into by and among the parties. In February 2016, the Company received notice that the Internal Revenue Service (the “IRS”) placed a lien against Medytox Solutions, Inc. and its subsidiaries relating to unpaid 2014 taxes due, plus penalties and interest, in the amount of $5.0 million. The Company paid $0.1 million toward its 2014 tax liability on March 2016. The Company filed its 2015 Federal tax return on March 15, 2016 and the accompanying election to carryback the reported net operating losses was filed in April 2016. On August 24, 2016, the lien was released, and on September of 2016 the Company received a refund from the IRS in the amount of $1.9 million. In November of 2016, the IRS commenced an audit of the Company’s 2015 Federal tax return. The Company is currently unable to predict the outcome of the audit or any liability to the Company that may result from the audit. On September 27, 2016, a tax warrant was issued against the Company by the Florida Department of Revenue (the “DOR”) for unpaid 2014 state income taxes in the approximate amount of $0.9 million, including penalties and interest. On January 25, 2017, the Company paid the DOR $250,000 as partial payment on this liability, and in February 2017 the Company entered into a Stipulation Agreement with the DOR which will allow the Company to make monthly installment payments of $35,000 until February 2018 and negotiate a new payment agreement then, if the balance of $0.3 million cannot be satisfied in a lump sum. If at any time during the Stipulation period the Company fails to timely file any required tax returns with the DOR or does not meet the payment obligations under the Stipulation Agreement, the entire amount due will be accelerated. The Company is current with the agreed payment plan. In December of 2016, TCS-Florida, L.P. (“Tetra”), filed suit against the Company for failure to make the required payments under an equipment leasing contract that the Company had with Tetra (see Note 8). On January 3, 2017, Tetra received a Default Judgment against the Company in the amount of $2.6 million, representing the balance owed on the leases, as well as additional interest, penalties and fees. The Company has recognized this amount in its consolidated financial statements as of December 31, 2016. In January and February of 2017, the Company made payments to Tetra in connection with this judgment aggregating to $0.7 million, and on February 15, 2017 the Company entered into a forbearance agreement with Tetra whereby the remaining $1.9 million due will be paid in 24 equal monthly installments. Payments commenced on May 1, 2017. The Company is current with its payments. In December of 2016, DeLage Landen Financial Services, Inc. (“DeLage”), filed suit against the Company for failure to make the required payments under an equipment leasing contract that the Company had with DeLage (see Note 8). On January 24, 2017, DeLage received a default judgment against the Company in the approximate amount of $1.0 million, representing the balance owed on the lease, as well as additional interest, penalties and fees. The Company has recognized this amount in its consolidated financial statements as of December 31, 2016. On February 8, 2017, a Stay of Execution was filed and under its terms the balance due will be paid in variable monthly installments through January of 2019, with an implicit interest rate of 4.97%. The Company is current in its payments. On December 7, 2016, the holders of the Tegal Notes (see Note 5) filed suit against the Company seeking payment for the amounts due under the notes in the aggregate of $0.4 million, including accrued interest. A request for entry of default judgment was filed on January 24, 2017. A Case Management Conference is scheduled for December 5, 2017. The Company has submitted a settlement agreement proposal to the holders of the Tegal Notes and is awaiting a response. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 12 – Segment Information Operating segments are defined under U.S. GAAP as components of an enterprise for which discrete financial information is available and are evaluated regularly by the enterprise’s chief operating decision maker in determining how to allocate resources and assess performance. The Company operates in four reportable business segments: ● Clinical Laboratory Operations ● Supportive Software Solutions ● Hospital Operations ● Corporate, The Company’s Decision Support and Informatics segment is now included in discontinued operations as it has been classified as held for sale as of September 30, 2017. The accounting policies of the reportable segments are the same as those described in Note 2, Summary of Significant Accounting Policies, of the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and in Note 1 for the adoption to ASU 2017-11. Selected financial information for the Company’s operating segments is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net revenues - External Clinical Laboratory Operations $ 586,663 $ (9,085 ) $ 1,994,639 $ 3,461,987 Supportive Software Solutions 208,070 50,447 698,359 605,575 Hospital Operations 619,478 - 619,478 - $ 1,414,211 $ 41,362 $ 3,312,476 $ 4,067,562 Net revenues - Intersegment (*** ) Supportive Software Solutions 217,431 502,055 501,924 1,036,396 $ 217,431 $ 502,055 $ 501,924 $ 1,036,396 (Loss) income from operations Clinical Laboratory Operations $ (1,039,118 ) $ (7,364,096 ) $ (3,809,146 ) $ (10,590,435 ) Supportive Software Solutions (660,800 ) (1,253,386 ) (1,721,694 ) (3,800,893 ) Hospital Operations (2,093,805 ) - (3,114,473 ) - Corporate (1,369,765 ) (2,940,956 ) (5,058,565 ) (7,059,644 ) Eliminations - 33,663 8,181 100,987 $ (5,163,488 ) $ (11,524,775 ) $ (13,695,697 ) $ (21,349,985 ) Depreciation and amortization Clinical Laboratory Operations $ 410,801 $ 549,748 $ 1,265,174 $ 1,646,167 Supportive Software Solutions 25,015 163,749 227,999 490,236 Hospital Operations 15,436 - 22,045 - Corporate 345 745 1,005 2,494 Eliminations - (33,663 ) (8,181 ) (100,987 ) $ 451,597 $ 680,579 $ 1,508,042 $ 2,037,910 Capital expenditures Clinical Laboratory Operations $ - $ - $ - $ 6,000 Supportive Software Solutions - - - 9,998 Hospital Operations 160,413 - 1,554,499 - $ 160,413 $ - $ 1,554,499 $ 15,998 ***` September 30, 2017 December 31, 2016 Total assets Clinical Laboratory Operations $ 1,686,167 $ 3,986,126 Supportive Software Solutions 1,767,251 2,602,428 Decision Support and Informatics - 60,000 Hospital Operations 1,748,986 - Corporate 3,037,112 2,130,191 Assets of AMSG classified as held for sale 997,497 414,662 Eliminations (2,871,080 ) (2,711,014 ) $ 6,365,933 $ 6,482,393 |
Recently Issued Accounting Stan
Recently Issued Accounting Standards | 9 Months Ended |
Sep. 30, 2017 | |
Recently Issued Accounting Standards | |
Recently Issued Accounting Standards | Note 13 – Recently Issued Accounting Standards The following table provides a brief description of recently issued accounting standards: Title and reference Prescribed Commentary Effective Date ASU No. 2015-11, “Inventory” (Topic 330): Simplifying the Measurement of Inventory. Fiscal years beginning after December 15, 2016 and for interim periods therein. In July 2015, the FASB issued ASU No. 2015-11, “Inventory” (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 simplifies the measurement of inventory by requiring certain inventory to be subsequently measured at the lower of cost and net realizable value. The amendments in this guidance are effective for fiscal years beginning after December 15, 2016 and for interim periods therein and did not have a significant impact on the Company’s consolidated financial statements upon adoption. ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” Fiscal years beginning after December 15, 2017 and for interim periods therein. In May 2014, the FASB issued guidance that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most recent current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also specifies the accounting for certain incremental costs of obtaining a contract and costs to fulfill a contract with a customer. Entities have the option of applying either a full retrospective approach to all periods presented or a modified approach that reflects differences prior to the date of adoption as an adjustment to equity. In April 2015, FASB deferred the effective date of this guidance until January 1, 2018 and the Company is currently assessing the impact of this guidance on its consolidated financial statements. ASU No. 2014-15, “Presentation of Financial Statements - Going Concern” (Subtopic 205-40): Disclosure of Uncertainty about an Entity’s Ability to Continue as a Going Concern. Fiscal years, and interim periods within those years, beginning on or after December 15, 2016, with early adoption permitted. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements - Going Concern” (Subtopic 205-40): Disclosure of Uncertainty about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 provides guidance that establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and setting rules for how this information should be disclosed in the financial statements. Adoption of this new standard did not have a significant impact on the Company’s consolidated financial statements. See Note 1 regarding management’s current disclosures regarding the Company’s ability to continue as a going concern. ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” Fiscal years beginning on or after December 15, 2016, with early adoption permitted. In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” (“ASU 2015-17”). Topic 740, Income Taxes, requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Deferred tax liabilities and assets are classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. Deferred tax liabilities and assets that are not related to an asset or liability for financial reporting are classified according to the expected reversal date of the temporary difference. To simplify the presentation of deferred income taxes, the amendments in ASU 2015-17 require that deferred income tax liabilities and assets be classified as noncurrent in a classified statement of financial position. For public business entities, the amendments in this update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Adoption of ASU 2015-17 did not have a material impact on the Company’s consolidated financial statements. Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” Annual and interim periods within the annual period beginning after December 15, 2018. In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The amendments in this update create Topic 842, Leases, and supersede the leases requirements in Topic 840, Leases. Topic 842 specifies the accounting for leases. The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. The main difference between Topic 842 and Topic 840 is the recognition of lease assets and lease liabilities for those leases classified as operating leases under Topic 840. Topic 842 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous leases guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model in Topic 842, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for public business entities. Early application of the amendments in ASU 2016-02 is permitted. The Company has not yet determined the impact that adoption of ASU 2016-02 will have on its consolidated financial statements. ASU No. 2017-11, “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815)” (“ASU 2017-11”) Fiscal years beginning on or after December 15, 2018, with early adoption permitted. The Company adopted this amendment as of its period ended June 30, 2017 (see Note 1). ASU No. 2017-12, “Derivatives and Hedging (Topic 815)”(“ASU 2017-12”) For public business entities, the amendments in this ASU 2017-12 are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption permitted in any interim period after issuance of this ASU. The amendments in ASU 2017-12 (“Update”) provide recognition and presentation guidance for qualifying hedges. The amendments in this Update more closely align the results of cash flow and fair value hedge accounting with risk management activities through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results in the financial statements. The amendments address specific limitations in current U.S. GAAP by expanding hedge accounting for both nonfinancial and financial risk components and by refining the measurement of hedge results to better reflect an entity’s hedging strategies. Thus, the amendments will enable an entity to report more faithfully the economic results of hedging activities for certain fair value and cash flow hedges and will avoid mismatches in earnings by allowing for greater precision when measuring change in fair value of the hedged item for certain fair value hedges. Additionally, by aligning the timing of recognition of hedge results with the earnings effect of the hedged item for cash flow and net investment hedges, and by including the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is presented, the results of an entity’s hedging program and the cost of executing that program will be more visible to users of financial statements. Additionally, the amendments in this Update should ease the operational burden of applying hedge accounting by allowing more time to prepare hedge documentation and allowing effectiveness assessments to be performed on a qualitative basis after hedge inception. The Company has not yet determined the impact that adoption of ASU 2017-12 will have on its consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 14 – Discontinued Operations On July 12, 2017, the Company announced plans to spin off AMSG as an independent publicly traded company by way of a tax-free distribution to the Company’s stockholders. Completion of the spinoff is expected to occur in the first quarter of 2018 and is subject to numerous conditions, including effectiveness of a Registration Statement on Form 10 to be filed with the Securities and Exchange Commission, and consents, including under various funding agreements previously entered into by the Company. A record date to determine those stockholders entitled to receive shares in the spin off should be approximately 30 to 60 days prior to the date of the spinoff. The strategic goal of the spinoff is to create two public companies, each of which can focus on its own strengths and operational plans. In addition, after the spinoff, each company will provide a distinct and targeted investment opportunity. In accordance with ASC 205-20 and having met the criteria for “held for sale”, as the Company reached this decision prior to September 30, 2017, the Company has reflected amounts relating to AMSG as a disposal group classified as held for sale and included as part of discontinued operations. AMSG had been included in the Decision Support and Informatics segment, except for the Company’s subsidiary, Alethea Laboratories, Inc., which had been included in the Clinical Laboratory Operations segment. Segment disclosures in Note 12 no longer include amounts relating to AMSG following the reclassification to discontinued operations. Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the condensed consolidated balance sheets consisted of the following: September 30, 2017 December 31, 2016 (unaudited) (unaudited) Cash $ 8,690 $ 2,962 Accounts receivable, net 6,503 267,681 Prepaid expenses and other current assets 53,582 67,257 Current assets classified as held for sale $ 68,775 $ 337,900 Property and equipment, net $ - $ 53,012 Goodwill 914,972 - Deposits 13,750 23,750 Non-current assets classified as held for sale $ 928,722 $ 76,762 Accounts payable (includes related parties) $ 837,989 $ 422,864 Accrued expenses 253,991 1,253,117 Current portion of notes payable 276,632 - Current liabilities classified as held for sale $ 1,368,612 $ 1,675,981 Non-current liabilities classified as held for sale $ - $ 26,598 Major line items constituting loss from discontinued operations in the consolidated statements of operations for the nine months ended September 30, 2017 and 2016 consisted of the following: September 30, 2017 September 30, 2016 (unaudited) (unaudited) Revenue from services $ 224,224 $ 1,154,967 Cost of services 9,282 162,266 Gross profit 214,942 992,701 Operating expenses 1,225,638 4,073,873 Other income (expenses) 42,775 (253,142 ) Loss from discontinued operations $ (1,053,471 ) $ (2,828,030 ) Acquisition of Genomas, Inc. on September 27, 2017 On September 29, 2016, the Company announced that it had entered into a Stock Purchase Agreement (the “Purchase Agreement”) to acquire the remaining outstanding equity securities of Genomas, Inc. (“Genomas”) that the Company did not already own, representing approximately 85% of the outstanding equity interests in Genomas, for 1,750,000 shares of the Company’s newly - designated Series F Preferred Stock. (The Series F Preferred Stock is more fully described in Note 9 and below.) Genomas is a biomedical company that develops PhyzioType Systems for DNA-guided management and prescription of drugs used to treat mental illness, pain, heart disease, and diabetes. The Company had previously announced that on July 19, 2016 it acquired approximately 15% of the outstanding equity of Genomas from Hartford Healthcare Corporation (“Hartford”), along with approximately $1.5 million of notes payable to Hartford and certain rights to and license participation in technology that is used by Genomas, for $250,000 in cash. Under the terms of the Purchase Agreement, the Company also agreed to assume approximately $0.8 million of indebtedness and other obligations of Genomas. The closing of this acquisition, which was subject to, among other things, receipt of regulatory and licensure approvals as well as other customary closing conditions, did not occur until September 27, 2017. As a result of delays in the closing of the transaction, the Company expensed all amounts previously paid for the company during the fourth quarter of 2016, including outstanding advances to Genomas in the amount of $0.4 million. Genomas will be spun-off as part of AMSG, so it is presented here in discontinued operations. The Series F Preferred Stock issued effective September 27, 2017 has an aggregate stated value of $1,750,000, and is convertible into shares of the Company’s common stock at any time after the one-year anniversary of the closing date at a conversion price per common share equal to the greater of $29.25 or the average closing sales price of the Company’s common stock for the 10 trading days immediately preceding the conversion. The maximum number of common shares issuable upon the conversion of the Series F Preferred Stock is 59,829. The Company valued the Series F Preferred Stock based on the value of the common stock issuable upon conversion on the date of the acquisition, which was $174,097. The following table summarizes the (preliminary) fair values of assets acquired and liabilities assumed at the acquisition date of Genomas. The Fair Market Value appears to equal cost. The Company has one year to revalue goodwill and other intangible assets in accordance with GAAP per ASC 850-10-25-14. Cash $ 7,990 Accounts receivable, net 6,503 Accounts payable and accrued expenses (458,736 ) Deferred revenue (20,000 ) Loans payable short-term (142,514 ) Note payable long-term (134,118 ) Total identifiable net liabilities (740,875 ) Goodwill 914,972 Total consideration $ 174,097 The acquisition of Genomas was accounted for under the purchase method of accounting and, accordingly, the unaudited condensed consolidated financial statements reflect the results of operations of Genomas from the date of acquisition. Unaudited pro forma results of operations for the three-months ended September 30, 2017 and 2016 and the nine-months ended September 30, 2017 and 2016 are included below. Such pro forma information assumes that the Genomas acquisition had occurred as of January 1, 2017 and 2016, respectively, and revenue is presented in accordance with our accounting policies. These unaudited pro forma statements have been prepared for comparative purposes only and are not intended to be indicative of what our results would have been had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future. Three Months Ended September 30, Nine Months Ended September 30, (unaudited) (unaudited) 2017 2016 2017 2016 Net Revenue $ 1,439,151 $ 122,432 $ 3,460,125 $ 4,251,890 Loss from discontinued operations (475,065 ) 452,083 (1,070,620 ) (1,871,057 ) Net loss (10,930,151 ) (10,770,201 ) (31,189,252 ) (21,158,568 ) Deemed dividend from triggher of down round provision feature (2,280,280 ) - (53,341,619 ) - Net loss to common shareholders $ (13,210,431 ) $ (10,770,201 ) $ (84,530,871 ) $ (21,158,568 ) Loss per share basic and diluted: Loss per share – discontinued operations $ (0.40 ) $ (4.92 ) $ (1.57 ) $ (35.71 ) Net loss per common share $ (10.99 ) $ (117.32 ) $ (123.69 ) $ (403.88 ) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 15 – Subsequent Events Common Stock Listing As previously announced, on April 18, 2017, the Company was notified by Nasdaq that the stockholders’ equity balance reported on the Company’s Form 10-K for the year ended December 31, 2016 fell below the $2.5 million minimum requirement for continued listing under the Nasdaq Capital Market’s Listing Rule 5550(b)(1) (the “Rule”). As of September 30, 2017, the Company reported a stockholders’ deficit of $18.8 million. In accordance with the Rule, the Company submitted a plan to Nasdaq outlining how it intended to regain compliance. On August 17, 2017, Nasdaq notified the Company that its plan to correct the stockholders’ equity deficiency did not contain sufficient evidence to support a correction being achieved in the required time frame. The Company appealed this decision to a Hearing Panel which, on October 23, 2017, maintained this position and denied the Company a continued listing. Effective October 25, 2017, the Company’s common stock (RNVA) and warrants to purchase common stock (RNVAW) were no longer listed on the Nasdaq Stock Market but began trading on the OTCQB instead. Subsequent to September 30, 2017, the Company has issued on an aggregate of 4.3 million shares of common stock upon the conversion of debentures and exercise of warrants. Series I-1 Convertible Preferred Stock On October 30, 2017, the Company closed an offering of $4,960,000 stated value of its newly-authorized Series I-1 Convertible Preferred Stock (the “Series I-1 Preferred Stock”). The offering was pursuant to the terms of the Securities Purchase Agreement, dated as of October 30, 2017 (the “Purchase Agreement”), between the Company and certain existing institutional investors of the Company. The Company received proceeds of $4,000,000 from the offering. The Purchase Agreement gives the investors the right to participate in up to 50% of any offering of common stock or common stock equivalents by the Company. In the event of any such offering, the investors may also exchange all or some of their Series I-1 Preferred Stock for such new securities on an $0.80 stated value of Series I-1 Preferred Stock for $1.00 of new subscription amount basis. The following is a summary of certain terms and provisions of the Series I-1 Preferred Stock: General. Rank. Conversion. Liquidation Preference. Voting Rights. Dividends. Redemption. Negative Covenants. Series I-2 Convertible Preferred Stock On October 30, 2017, the Company entered into exchange agreements with the holders of the September Debentures to provide that the holders may, from time to time, exchange their September Debentures for shares of a newly-authorized Series I-2 Convertible Preferred Stock of the Company (the “Series I-2 Preferred Stock”). The exchange agreements permit the holders of the September Debentures to exchange specified principal amounts of the September Debentures on various closing dates from December 2, 2017 through March 1, 2018. Any exchange is at the option of the holders. Each holder may reduce the principal amount of September Debentures exchanged on any particular closing date, or elect not to exchange any September Debentures at all on a closing date. If a holder does choose to exchange less principal amount of September Debentures, or no September Debentures at all, it can carry forward such lesser amount to a future closing date and then exchange more than the originally specified principal amount for that later closing date. For each $0.80 of principal amount of September Debenture surrendered to the Company at any closing date, the Company will issue the holder a share of Series I-2 Preferred Stock with a stated value of $1.00. Each share of Series I-2 Preferred Stock is convertible into shares of the Company’s common stock at any time at the option of the holder at a conversion price equal to the lesser of (i) $1.00, subject to adjustment, and (ii) 85% of the lesser of the volume weighted average market price of the common stock on the day prior to conversion or on the day of conversion. The conversion price is subject to “full ratchet” and other customary anti-dilution protections as more fully described in the Certificate of Designation of the Series I-2 Preferred Stock. The following is a summary of certain terms and provisions of the Series I-2 Preferred Stock. General. Rank. Liquidation Preference. Voting Rights. Dividends Redemption. Negative Covenants. Modification of Anti-Dilution Provisions of the March Debentures and March Warrants On October 30, 2017, the Company agreed to amend the March Debentures and March Warrants, which are more fully discussed in Note 6, to remove the floor in the anti-dilution provisions therein. Conversions of March Debentures and Exercises of Warrants During the month of October 2017, $2,185,464.02 aggregate principal amount of March Debentures were exercised for 1,924,037 shares of common stock and the Company received $633,000 upon the exercise of Class B Warrants issued in March 2017 for the issuance of 600,000 shares of common stock. |
Organization and Basis of Pre22
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the 2016 audited financial statements included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 10, 2017. These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC, and therefore omit or condense certain footnotes and other information normally included in consolidated interim financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All material intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) considered necessary for the fair presentation of the financial position and results of operations and cash flows for the interim periods reported herein. The results of operations presented are not necessarily indicative of the results to be expected for any other interim period or for the entire year. During the three and nine months ended September 30, 2017 and 2016, comprehensive loss was equal to the net loss amounts presented in the accompanying condensed consolidated statements of operations. In addition, certain prior year balances have been reclassified to conform to the current presentation. |
Reclassification | Reclassification The Company has reclassified certain amounts in the 2016 condensed consolidated financial statements to be consistent with the 2017 presentation. These principally relate to classification of certain revenues, cost of revenues and related segment data, as well as balance sheet classifications to assets and liabilities held for sale. Reclassifications relating to the discontinued operations of AMSG are described further in Note 14. The reclassifications had no impact on operations or cash flows for the three and nine months ended September 30, 2016. |
Reverse Stock Splits | Reverse Stock Splits On February 7, 2017, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-30 reverse stock split of the Company’s shares of common stock effective on February 22, 2017 and on September 21, 2017, the Company’s Board of Directors approved an amendment to the Company’s Certificate of Incorporation to effect a 1-for-15 reverse stock split effective October 5, 2017 (the “Reverse Stock Splits”). The stockholders of the Company had approved these amendments to the Company’s Certificate of Incorporation on December 22, 2016 for the February 7, 2017 reverse stock split and on September 20, 2017 for the October 5, 2017 reverse stock split. In both cases, the Company’s stockholders had granted authorization to the Board of Directors to determine in its discretion the specific ratio, subject to limitations, and the timing of the reverse splits within certain specified effective dates. As a result of the Reverse Stock Splits, every 30 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock, par value $0.01 per share, on February 7, 2017 and every 15 shares of the Company’s then outstanding common stock was combined and automatically converted into one share of the Company’s common stock, par value $0.01 per share, on October 5, 2017. In addition, the conversions and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants, stock options, restricted stock, equity incentive plans and convertible notes payable were proportionately adjusted at the 1:30 reverse split ratio and again at the 1:15 reverse split ratio in accordance with the terms of such instruments. In addition, proportionate voting rights and other rights of common stockholders were not affected by the Reverse Stock Splits, other than as a result of the rounding up of fractional shares in the February reverse split and the payment of cash in lieu of fractional shares in the October reverse split, as no fractional shares were issued in connection with the Reverse Stock Splits. The par value and other terms of the common stock were not affected by the Reverse Stock Splits. The authorized capital of the Company of 500,000,000 shares of common stock and 5,000,000 shares of preferred stock were also unaffected by the Reverse Stock Splits. All share, per share and capital stock amounts for all periods presented have been restated to give effect to the Reverse Stock Splits. |
Adoption of ASU 2017-11 | Adoption of ASU 2017-11 In July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-11 “Earnings Per Share (Topic 260) Distinguishing Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic 815).” The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. Under current GAAP, an equity-linked financial instrument with a down round feature that otherwise is not required to be classified as a liability under the guidance in Topic 480 is evaluated under the guidance in Topic 815, Derivatives and Hedging, to determine whether it meets the definition of a derivative. If it meets that definition, the instrument (or embedded feature) is evaluated to determine whether it is indexed to an entity’s own stock as part of the analysis of whether it qualifies for a scope exception from derivative accounting. Generally, for warrants and conversion options embedded in financial instruments that are deemed to have a debt host (assuming the underlying shares are readily convertible to cash or the contract provides for net settlement such that the embedded conversion option meets the definition of a derivative), the existence of a down round feature results in an instrument not being considered indexed to an entity’s own stock. This results in a reporting entity being required to classify the freestanding financial instrument or the bifurcated conversion option as a liability, which the entity must measure at fair value initially and at each subsequent reporting date. The amendments in this Update revise the guidance for instruments with down round features in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, which is considered in determining whether an equity-linked financial instrument qualifies for a scope exception from derivative accounting. An entity still is required to determine whether instruments would be classified in equity under the guidance in Subtopic 815-40 in determining whether they qualify for that scope exception. If they do qualify, freestanding instruments with down round features are no longer classified as liabilities and embedded conversion options with down round features are no longer bifurcated. For entities that present EPS in accordance with Topic 260, and when the down round feature is included in an equity-classified freestanding financial instrument, the value of the effect of the down round feature is treated as a dividend when it is triggered and as a numerator adjustment in the basic EPS calculation. This reflects the occurrence of an economic transfer of value to the holder of the instrument, while alleviating the complexity and income statement volatility associated with fair value measurement on an ongoing basis. Convertible instruments are unaffected by the Topic 260 amendments in this Update. Those amendments in Part 1 of this Update are a cost savings relative to current GAAP. This is because, assuming the required criteria for equity classification in Subtopic 815-40 are met, an entity that issued such an instrument no longer measures the instrument at fair value at each reporting period (in the case of warrants) or separately accounts for a bifurcated derivative (in the case of convertible instruments) on the basis of the existence of a down round feature. For convertible instruments with embedded conversion options that have down round features, applying specialized guidance such as the model for contingent beneficial conversion features rather than bifurcating an embedded derivative also reduces cost and complexity. Under that specialized guidance, the issuer recognizes the intrinsic value of the feature only when the feature becomes beneficial instead of bifurcating the conversion option and measuring it at fair value each reporting period. The amendments in Part II of this Update replace the indefinite deferral of certain guidance in Topic 480 with a scope exception. This has the benefit of improving the readability of the Codification and reducing the complexity associated with navigating the guidance in Topic 480. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective; or 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company has determined that this amendment had a material impact on its condensed consolidated financial statements and has early adopted this accounting standard update. The cumulative effect of the adoption of ASU 2017-11 resulted in the reclassification of the derivative liability recorded of $56 million and the reversal of $41 million of interest expense recorded in the Company’s first fiscal quarter of 2017. The remaining $16 million was offset to additional paid in capital (discount on convertible debenture). Additionally, the Company recognized a deemed dividend from the trigger of the down round provision feature of $53.3 million. A $51 million deemed dividend was recorded retrospectively as of the beginning of the issuance of the March 2017 debentures where the initial derivative liability was recorded. A $2.3 million deemed dividend adjustment was recorded in the three months ended September 30, 2017 as a result of the down round provision feature. |
Going Concern | Going Concern The Company’s condensed consolidated financial statements are prepared using U.S. GAAP applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has accumulated significant losses and has negative cash flows from operations, and at September 30, 2017 had a working capital deficit and stockholders’ deficit of $18.0 million and $18.8 million, respectively, which raise substantial doubt about its ability to continue as a going concern. In addition, the Company’s cash position as of the date of this report is critically deficient, critical payments are not being made in the ordinary course of business and certain indebtedness in the amount of $6.0 million matured on March 31, 2017, which the Company does not have the financial resources to satisfy (see Note 5), all of which raise substantial doubt about the Company’s ability to continue as a going concern. The Company continues to consider efficiencies and is currently using one laboratory for the majority of its toxicology diagnostics thereby reducing the number of employees and associated operating expenses, in order to reduce costs. In addition, the Company received approximately $15.7 million in cash from the issuances of debentures and warrants in the first nine months of 2017 (see Note 6), $3.8 million from related parties and an additional $4.0 million of proceeds on October 30, 2017 from the issuance of convertible preferred stock (see Note 15). In July 2017, the Company announced that it plans to spin off its Advanced Molecular Services Group (“AMSG”) as an independent publicly traded company by way of a tax-free distribution to its shareholders. Completion of the spinoff of AMSG is expected to occur during the first quarter of 2018, and is subject to numerous conditions, including effectiveness of a Registration Statement on Form 10 to be filed with the Securities and Exchange Commission and consents, including under various funding agreements previously entered into by the Company. The intent of the spinoff of AMSG is to create two public companies, each of which can focus on its own strengths and operational plans. In accordance with ASC 205-20 and having met the criteria for “held for sale”, the Company has reflected amounts relating to AMSG as a disposal group classified as held for sale and included as part of discontinued operations. AMSG is no longer included in the segment reporting following the reclassification to discontinued operations. The discontinued operations of AMSG are described further in Note 14. The Company also announced that the Big South Fork Medical Center received CMS regional office licensure approval and opened its doors on August 8, 2017. The hospital provided services to over 1,854 patients and recognized approximately $0.6 million of revenues during the three months ended September 30, 2017. The Company may amend its current revenue recognition policy and percentage for the hospital when payments are received to support amended revenue recognition methodologies. Therefore, the Company expects that the opening of the hospital will continue to provide additional revenue and cash flow sources. There can be no assurance that the Company will be able to achieve its business plan, raise any additional capital or secure the additional financing necessary to implement its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to significantly reduce its operating costs, increase its revenues and eventually regain profitable operations. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Recent Events | Recent Events Common Stock Listing Effective October 25, 2017, the Company’s common stock (RNVA) and warrants to purchase common stock (RNVAW) were no longer listed on the Nasdaq Stock Market but began trading on the OTCQB instead, as more fully discussed in Note 15. Financing Agreements On October 30, 2017, the Company issued its Series I-1 Convertible Preferred Stock, and modified the anti-dilution provisions of certain outstanding debentures and warrants that were issued in March 2017, as more fully discussed in Note 15. |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable at September 30, 2017 (unaudited) and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Accounts receivable - laboratory services $ 4,118,407 $ 12,715,835 Accounts receivable - hospital 2,982,771 - Accounts receivable - all others 528,196 499,508 Total accounts receivable 7,629,374 13,215,343 Less: Allowance for discounts (3,583,014 ) (11,664,490 ) Allowance for discounts - hospital (2,368,565 ) - Allowance for bad debts (1,276,769 ) (350,954 ) Accounts receivable, net $ 401,026 $ 1,199,899 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment at September 30, 2017 (unaudited) and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Medical equipment $ 713,799 $ 696,195 Building 1,359,484 - Equipment 461,912 461,912 Equipment under capital leases 4,497,025 4,497,025 Furniture 408,101 377,630 Leasehold improvements 1,333,385 1,329,387 Vehicles 196,534 196,534 Computer equipment 587,742 564,742 Software 1,859,289 1,739,348 11,417,271 9,862,773 Less accumulated depreciation (8,327,224 ) (6,819,183 ) Property and equipment, net $ 3,090,047 $ 3,043,590 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses at September 30, 2017 (unaudited) and December 31, 2016 consisted of the following: September 30, 2017 December 31, 2016 Commisions payable $ 29,860 $ 44,788 Accrued payroll and related liabilities 1,755,131 493,521 Accrued interest 2,211,588 1,471,191 Other accrued expenses 1,013,719 872,529 Total accrued expenses $ 5,010,298 $ 2,882,029 |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes Payable – Third Parties September 30, 2017 December 31, 2016 Loan payable under prepaid forward purchase contract $ 5,000,000 $ 5,000,000 Loan payable to TCA Global Master Fund, LP ("TCA") in the original principal amount of $3 million at 16% interest (the "TCA Debenture"). Principal and interest payments due in various installments through December 31, 2017. 1,957,476 3,000,000 Notes payable to CommerceNet and Jay Tenenbaum in the original principal amount of $500,000, bearing interest at 6% per annum (the "Tegal Notes"). Prinicpal and interest payments are due annually from July 12, 2015 through July 12, 2017 341,612 341,612 Other convertible notes payable - 440,000 Unamortized discount on other convertible notes - (179,889 ) Derivative liability associated with the TCA Debenture, at fair value - 409,524 7,299,088 9,011,247 Less current portion (7,299,088 ) (9,011,247 ) Notes payable - third parties, net of current portion $ - $ - |
Schedule of Notes Payable - Related Parties | Notes Payable – Related Parties September 30, 2017 December 31, 2016 Loan payable to Alcimede LLC, bearing interest at 6% per annum, with all principal and interest due on February 2, 2018 $ 168,500 $ 218,500 Other advances from related parties 55,000 110,000 223,500 328,500 Less current portion (223,500 ) (328,500 ) Total notes payable - related parties, net of current portion $ - $ - |
Debentures (Tables)
Debentures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debentures | The carrying amount of all outstanding debentures as of September 30, 2017 (unaudited) is as follows: September 30, 2017 Debentures $ 20,962,234 Discount on Debentures (16,398,666 ) Deferred financing fees (324,563 ) 4,239,005 Less current portion - Debentures $ 4,239,005 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Capital Leases | The Company leases various assets under capital leases expiring through 2020 as follows. At September 30, 2017 (unaudited) and December 31, 2016, capital lease obligations consisted of the following: September 30, 2017 December 31, 2016 Medical equipment $ 4,497,025 $ 4,497,025 Less accumulated depreciation (3,582,631 ) (2,809,511 ) Net $ 914,394 $ 1,687,514 |
Aggregate Future Minimum Rentals Under Capital Leases | Aggregate future minimum rentals under capital leases are as follows: Year ended December 31, 2017 (October through December) $ 493,282 2018 1,427,375 2019 377,919 2020 32,611 Total 2,331,187 Less interest 103,983 Present value of minimum lease payments 2,227,204 Less current portion of capital lease obligations 1,491,666 Capital lease obligations, net of current portion $ 735,538 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Stock Option Activity | The following table summarizes the Company’s stock option activity for the nine months ended September 30, 2017: Number of options Weighted- average exercise price Weighted- average contractual term (Yrs.) Outstanding at December 31, 2016 47,268 $ 1,941.45 8.93 Granted - - Expired - - Forfeit (8,790 ) - Exercised - - Outstanding at September 30, 2017 38,478 $ 2,072.75 8.68 Exercisable at September 30, 2017 31,811 $ 2,445.84 |
Schedule of Warrant Issued Activity | The following summarizes the information related to warrants issued and the activity during the nine months ended September 30, 2017: Number of warrants Weighted average exercise price Balance at December 31, 2016 93,843 $ 175.50 Warrants issued during the period 17,900,999 $ 4.58 Warrants exchanged/exercised during period (6,500 ) Warrants expired during the period - Balance at September 30, 2017 17,988,342 $ 5.40 |
Schedule of Anti-Dilutive | As of September 30, 2017 and 2016, the following potential common stock equivalents were excluded from the calculation of diluted loss per share as their effect was anti-dilutive: As of September 30, 2017 2016 Warrants 17,988,342 78,102 Convertible preferred stock 71,147 47,463 Convertible debt 4,353,898 3,911 Stock options 38,478 49,331 22,451,865 178,807 |
Supplemental Disclosure of Ca30
Supplemental Disclosure of Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Cash Flow Information | The supplemental cash flow information for the nine months ended September 30, 2017 and 2016 (unaudited) is as follows: Nine Months Ended September 30, 2017 2016 Cash paid for interest $ 1,106,835 $ 1,237,622 Cash paid for income taxes $ 506,313 $ - Non-cash investing and financing activities: Services and severance settled through issuance of common stock $ 161,003 $ 2,131,829 Exchange of convertible debentures for convertible debentures and warrants $ 10,734,336 $ - Series F Preferred Stock issued for business acquisition $ 174,097 $ - Note payable and warrants settled through issuance of common stock $ 440,000 $ - Convertible debenture issued in exchange of Series H Preferred Stock $ 2,695,760 $ - Debentures converted into common stock $ 4,064,162 $ - Deemed dividend for trigger of down round provision feature $ 53,341,619 $ - |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | Selected financial information for the Company’s operating segments is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net revenues - External Clinical Laboratory Operations $ 586,663 $ (9,085 ) $ 1,994,639 $ 3,461,987 Supportive Software Solutions 208,070 50,447 698,359 605,575 Hospital Operations 619,478 - 619,478 - $ 1,414,211 $ 41,362 $ 3,312,476 $ 4,067,562 Net revenues - Intersegment (*** ) Supportive Software Solutions 217,431 502,055 501,924 1,036,396 $ 217,431 $ 502,055 $ 501,924 $ 1,036,396 (Loss) income from operations Clinical Laboratory Operations $ (1,039,118 ) $ (7,364,096 ) $ (3,809,146 ) $ (10,590,435 ) Supportive Software Solutions (660,800 ) (1,253,386 ) (1,721,694 ) (3,800,893 ) Hospital Operations (2,093,805 ) - (3,114,473 ) - Corporate (1,369,765 ) (2,940,956 ) (5,058,565 ) (7,059,644 ) Eliminations - 33,663 8,181 100,987 $ (5,163,488 ) $ (11,524,775 ) $ (13,695,697 ) $ (21,349,985 ) Depreciation and amortization Clinical Laboratory Operations $ 410,801 $ 549,748 $ 1,265,174 $ 1,646,167 Supportive Software Solutions 25,015 163,749 227,999 490,236 Hospital Operations 15,436 - 22,045 - Corporate 345 745 1,005 2,494 Eliminations - (33,663 ) (8,181 ) (100,987 ) $ 451,597 $ 680,579 $ 1,508,042 $ 2,037,910 Capital expenditures Clinical Laboratory Operations $ - $ - $ - $ 6,000 Supportive Software Solutions - - - 9,998 Hospital Operations 160,413 - 1,554,499 - $ 160,413 $ - $ 1,554,499 $ 15,998 ***` September 30, 2017 December 31, 2016 Total assets Clinical Laboratory Operations $ 1,686,167 $ 3,986,126 Supportive Software Solutions 1,767,251 2,602,428 Decision Support and Informatics - 60,000 Hospital Operations 1,748,986 - Corporate 3,037,112 2,130,191 Assets of AMSG classified as held for sale 997,497 414,662 Eliminations (2,871,080 ) (2,711,014 ) $ 6,365,933 $ 6,482,393 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operation of Balance Sheet and Operation Statement | Carrying amounts of major classes of assets and liabilities classified as held for sale and included as part of discontinued operations in the condensed consolidated balance sheets consisted of the following: September 30, 2017 December 31, 2016 (unaudited) (unaudited) Cash $ 8,690 $ 2,962 Accounts receivable, net 6,503 267,681 Prepaid expenses and other current assets 53,582 67,257 Current assets classified as held for sale $ 68,775 $ 337,900 Property and equipment, net $ - $ 53,012 Goodwill 914,972 - Deposits 13,750 23,750 Non-current assets classified as held for sale $ 928,722 $ 76,762 Accounts payable (includes related parties) $ 837,989 $ 422,864 Accrued expenses 253,991 1,253,117 Current portion of notes payable 276,632 - Current liabilities classified as held for sale $ 1,368,612 $ 1,675,981 Non-current liabilities classified as held for sale $ - $ 26,598 Major line items constituting loss from discontinued operations in the consolidated statements of operations for the nine months ended September 30, 2017 and 2016 consisted of the following: September 30, 2017 September 30, 2016 (unaudited) (unaudited) Revenue from services $ 224,224 $ 1,154,967 Cost of services 9,282 162,266 Gross profit 214,942 992,701 Operating expenses 1,225,638 4,073,873 Other income (expenses) 42,775 (253,142 ) Loss from discontinued operations $ (1,053,471 ) $ (2,828,030 ) |
Schedule of Fair Value of Acquired Assets and Liabilities Acquisition | The Company has one year to revalue goodwill and other intangible assets in accordance with GAAP per ASC 850-10-25-14. Cash $ 7,990 Accounts receivable, net 6,503 Accounts payable and accrued expenses (458,736 ) Deferred revenue (20,000 ) Loans payable short-term (142,514 ) Note payable long-term (134,118 ) Total identifiable net liabilities (740,875 ) Goodwill 914,972 Total consideration $ 174,097 |
Schedule of Pro Forma Information | These unaudited pro forma statements have been prepared for comparative purposes only and are not intended to be indicative of what our results would have been had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future. Three Months Ended September 30, Nine Months Ended September 30, (unaudited) (unaudited) 2017 2016 2017 2016 Net Revenue $ 1,439,151 $ 122,432 $ 3,460,125 $ 4,251,890 Loss from discontinued operations (475,065 ) 452,083 (1,070,620 ) (1,871,057 ) Net loss (10,930,151 ) (10,770,201 ) (31,189,252 ) (21,158,568 ) Deemed dividend from triggher of down round provision feature (2,280,280 ) - (53,341,619 ) - Net loss to common shareholders $ (13,210,431 ) $ (10,770,201 ) $ (84,530,871 ) $ (21,158,568 ) Loss per share basic and diluted: Loss per share – discontinued operations $ (0.40 ) $ (4.92 ) $ (1.57 ) $ (35.71 ) Net loss per common share $ (10.99 ) $ (117.32 ) $ (123.69 ) $ (403.88 ) |
Organization and Basis of Pre33
Organization and Basis of Presentation (Details Narrative) - USD ($) | Sep. 21, 2017 | Feb. 07, 2017 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Reserve stock split, description | 1-for-15 reverse stock split effective October 5, 2017 | 1-for-30 reverse stock split of the Companys shares of common stock effective on February 22, 2017 | |||||
Common stock conversion description | As a result of the Reverse Stock Splits, every 30 shares of the Company;s then outstanding common stock was combined and automatically converted into one share | ||||||
Common stock par value | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Derivative liability | $ 56,000,000 | ||||||
Interest expenses | 41,000,000 | $ (8,441,043) | |||||
Offset to additional paid in capital | 16,000,000 | ||||||
Deemed dividend | $ 2,300,000 | $ 51,000,000 | 53,300,000 | ||||
Working capital deficit | 18,000,000 | 18,000,000 | |||||
Stockholder's equity | 18,788,423 | 18,788,423 | $ 14,885,896 | ||||
Indebtedness amount | 6,000,000 | 6,000,000 | |||||
Proceeds from issuance debentures | 15,700,000 | ||||||
Proceeds from issuance of warrants | 15,700,000 | ||||||
Proceeds from related parties | $ 3,805,000 | $ 8,285,000 | |||||
Revenue earned for services | $ 600,000 | ||||||
October 5 2017 [Member] | |||||||
Common stock conversion description | Every 15 shares of the Companys then outstanding common stock was combined and automatically converted into one share | ||||||
Common stock par value | $ 0.01 | $ 0.01 | |||||
October 30 2017 [Member] | |||||||
Proceeds from issuance of convertible preferred stock | $ 4,000,000 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Accounts Receivable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Accounts receivable, gross | $ 7,629,374 | $ 13,215,343 |
Less: Allowance for discounts | (3,583,014) | (11,664,490) |
Less: Allowance for bad debts | (1,276,769) | (350,954) |
Accounts receivable, net | 401,026 | 1,199,899 |
Laboratory Service [Member] | ||
Accounts receivable, gross | 4,118,407 | 12,715,835 |
Hospital [Member] | ||
Accounts receivable, gross | 2,982,771 | |
Less: Allowance for discounts | (2,368,565) | |
Others [Member] | ||
Accounts receivable, gross | $ 528,196 | $ 499,508 |
Property and Equipment (Details
Property and Equipment (Details Narrative) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($)a | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)a | Sep. 30, 2016USD ($) | |
Area of land | a | 4.3 | 4.3 | ||
Payments to acquire assets | $ | $ 1,554,499 | $ 15,998 | ||
Depreciation expenses | $ | $ 500,000 | $ 700,000 | $ 1,500,000 | $ 2,000,000 |
Hospital Building [Member] | ||||
Area of land | a | 52,000 | 52,000 | ||
Professional Building [Member] | ||||
Area of land | a | 6,300 | 6,300 | ||
Hospital Asset [Member] | ||||
Payments to acquire assets | $ | $ 1,000,000 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Property and equipment, gross | $ 11,417,271 | $ 9,862,773 |
Less accumulated depreciation | (8,327,224) | (6,819,183) |
Property and equipment, net | 3,090,047 | 3,043,590 |
Medical Equipment [Member] | ||
Property and equipment, gross | 713,799 | 696,195 |
Building [Member] | ||
Property and equipment, gross | 1,359,484 | |
Equipment [Member] | ||
Property and equipment, gross | 461,912 | 461,912 |
Equipment under Capital Leases [Member] | ||
Property and equipment, gross | 4,497,025 | 4,497,025 |
Furniture [Member] | ||
Property and equipment, gross | 408,101 | 377,630 |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 1,333,385 | 1,329,387 |
Vehicles [Member] | ||
Property and equipment, gross | 196,534 | 196,534 |
Computer Equipment [Member] | ||
Property and equipment, gross | 587,742 | 564,742 |
Software [Member] | ||
Property and equipment, gross | $ 1,859,289 | $ 1,739,348 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Commisions payable | $ 29,860 | $ 44,788 |
Accrued payroll and related liabilities | 1,755,131 | 493,521 |
Accrued interest | 2,211,588 | 1,471,191 |
Other accrued expenses | 1,013,719 | 872,529 |
Total accrued expenses | $ 5,010,298 | $ 2,882,029 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Mar. 21, 2017 | Mar. 13, 2017 | Feb. 02, 2017 | Nov. 03, 2016 | Sep. 15, 2016 | Mar. 31, 2016 | Jun. 29, 2015 | Feb. 02, 2015 | Mar. 31, 2017 | Sep. 30, 2017 | Nov. 11, 2017 | Jun. 30, 2017 | May 31, 2017 | Mar. 15, 2017 | Mar. 07, 2017 | Dec. 31, 2016 | Feb. 03, 2015 |
Consideration received | $ 5,000,000 | ||||||||||||||||
Estimated value of accounts receivable | $ 8,700,000 | ||||||||||||||||
Adjustment value of debt | $ 0 | $ 1,500,000 | |||||||||||||||
Investment percentage | 20.00% | ||||||||||||||||
Debt term | 6 months | ||||||||||||||||
Repayment of debt | $ 500,000 | ||||||||||||||||
Debt instrument description | All payments recovered from the accounts receivable up to $5.25 million, if paid in full within six months, or $5.5 million, if not paid in full within six months, and (iii) 20% of all payments of the accounts receivable in excess of amounts received in (i) and (ii). On March 31, 2017, to the extent that the counterparty has not been paid $6.0 million, the Company was required to pay the difference, plus 30% interest per annum on the total balance. To date, the Company has not recovered any payments against the accounts receivable. | ||||||||||||||||
Accrued expenses | $ 1,900,000 | ||||||||||||||||
Due to related party | $ 6,900,000 | ||||||||||||||||
Debt instrument periodic payment | $ 400,000 | ||||||||||||||||
Debt instrument maturity date | Aug. 31, 2017 | ||||||||||||||||
Warrant to purchase common stock | 2,056 | ||||||||||||||||
Stock options exercise price per share | |||||||||||||||||
Loan outstanding | |||||||||||||||||
Accrued interest | 200,000 | ||||||||||||||||
Alcimede LLC [Member] | |||||||||||||||||
Debt instrument maturity date | Feb. 2, 2016 | ||||||||||||||||
Due from related party | $ 3,000,000 | ||||||||||||||||
Debt instrument interest rate | 6.00% | ||||||||||||||||
Debt instrument extended due date | Aug. 2, 2017 | ||||||||||||||||
Share based payment of exercised options granted | 66,667 | ||||||||||||||||
Stock options exercise price per share | $ 37.50 | ||||||||||||||||
Loan outstanding | $ 2,500,000 | ||||||||||||||||
Repayment of common stock | $ 300,000 | ||||||||||||||||
Mr Lagan [Member] | |||||||||||||||||
Repayment of debt | $ 50,000 | 100,000 | |||||||||||||||
Debt instrument extended due date | Feb. 2, 2018 | ||||||||||||||||
Stockholder [Member] | |||||||||||||||||
Repayment of debt | $ 50,000 | ||||||||||||||||
Due to related party | $ 75,000 | ||||||||||||||||
Mr Diamantis [Member] | |||||||||||||||||
Due to related party | $ 3,600,000 | ||||||||||||||||
Debt instrument face amount | $ 3,800,000 | ||||||||||||||||
Warrant to purchase common stock | 27,667 | ||||||||||||||||
Warrant exercise per share | $ 15 | ||||||||||||||||
Debt instrument interest rate | 10.00% | 10.00% | |||||||||||||||
TCA Debenture [Member] | |||||||||||||||||
Repayment of debt | $ 750,000 | ||||||||||||||||
Accrued and unpaid interest | 100,000 | $ 400,000 | |||||||||||||||
Debt instrument fee | $ 150,000 | ||||||||||||||||
Debt instrument maturity date | Jun. 27, 2017 | ||||||||||||||||
TCA Debenture [Member] | April 2017 Through September 2017 [Member] | |||||||||||||||||
Debt instrument periodic payment | $ 2,600,000 | ||||||||||||||||
September 2016 Notes [Member] | |||||||||||||||||
Debt instrument maturity date | Mar. 15, 2017 | ||||||||||||||||
Debt instrument conversion price | $ 112.50 | ||||||||||||||||
Warrant to purchase common stock | 4,444 | ||||||||||||||||
Warrant exercise per share | $ 180 | ||||||||||||||||
Warrant exchanged shares of common stock | 26,667 | ||||||||||||||||
September 2016 Notes [Member] | Two Investor [Member] | |||||||||||||||||
Debt instrument face amount | $ 400,000 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Unamortized discount on other convertible notes | $ (179,889) | |
Derivative liability associated with the TCA Debenture, at fair value | 409,524 | |
Loans with affiliates and unrelated parties | 7,299,088 | 9,011,247 |
Less current portion | (7,299,088) | (9,011,247) |
Notes payable, net of current portion | ||
Notes Payable Third Parties One [Member] | ||
Face value of note | 5,000,000 | 5,000,000 |
Notes Payable Third Parties Two [Member] | ||
Face value of note | 1,957,476 | 3,000,000 |
Notes Payable Third Parties Three [Member] | ||
Face value of note | 341,612 | 341,612 |
Notes Payable Third Parties Four [Member] | ||
Face value of note | $ 440,000 |
Notes Payable - Schedule of N40
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Notes Payable Third Parties Two [Member] | ||
Purchase contract amount | $ 3,000,000 | |
Debt instruments interest rate | 16.00% | |
Debt maturity description | December 31, 2017 | |
Notes Payable Third Parties Three [Member] | ||
Purchase contract amount | $ 500,000 | |
Debt instruments interest rate | 6.00% | |
Debt maturity description | July 12, 2015 through July 12, 2017 |
Notes Payable - Schedule of N41
Notes Payable - Schedule of Notes Payable - Related Parties (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Notes payable | ||
Less current portion | 223,500 | 328,500 |
Notes Payable Related Parties One [Member] | ||
Face value of note | 168,500 | 218,500 |
Notes Payable Related Parties [Member] | ||
Face value of note | 55,000 | 110,000 |
Notes payable | 223,500 | 328,500 |
Less current portion | (223,500) | (328,500) |
Total notes payable - related parties, net of current portion |
Notes Payable - Schedule of N42
Notes Payable - Schedule of Notes Payable - Related Parties (Details) (Parenthetical) | 9 Months Ended |
Sep. 30, 2017 | |
Debt instuments maturity date | Aug. 31, 2017 |
Notes Payable Related Parties One [Member] | |
Debt instruments interest rate | 6.00% |
Debt instuments maturity date | Feb. 2, 2018 |
Debentures (Details Narrative)
Debentures (Details Narrative) - USD ($) | Sep. 21, 2017 | Sep. 19, 2017 | Jul. 17, 2017 | Mar. 21, 2017 | Feb. 07, 2017 | Feb. 02, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Jun. 22, 2017 | Jun. 02, 2017 | Mar. 15, 2017 |
Warrants to purchase common stock | 2,056 | ||||||||||||||||
Debt instrument maturity date | Aug. 31, 2017 | ||||||||||||||||
Proceeds from debt | $ 15,700,000 | ||||||||||||||||
Repayment of debt | $ 500,000 | ||||||||||||||||
Convertible debt | $ 20,962,234 | $ 20,962,234 | $ 20,962,234 | 20,962,234 | |||||||||||||
Interest expenses | $ 41,000,000 | (8,441,043) | |||||||||||||||
Non-cash interest and amortization of debt discount expense | 4,800,000 | 14,700,000 | |||||||||||||||
Proceeds from issuance warrants | 15,700,000 | ||||||||||||||||
Amortization of debt discount | (6,228,352) | $ (2,474,497) | |||||||||||||||
Reserve stock split, description | 1-for-15 reverse stock split effective October 5, 2017 | 1-for-30 reverse stock split of the Companys shares of common stock effective on February 22, 2017 | |||||||||||||||
Proceeds from issuance of debenture and warrants | 15,700,000 | ||||||||||||||||
Unamortized Discount | $ 16,398,666 | $ 16,398,666 | $ 16,398,666 | 16,398,666 | |||||||||||||
June Warrants [Member] | Accredited Investor [Member] | |||||||||||||||||
Warrant purchase price | 1,902,700 | ||||||||||||||||
Proceeds from issuance warrants | 1,500,000 | ||||||||||||||||
March Offerings [Member] | March Warrants and Exchange Warrants [Member] | |||||||||||||||||
Debt instrument original amount | $ 41,300,000 | ||||||||||||||||
March Offerings [Member] | Debenture Warrant [Member] | |||||||||||||||||
Debenture description | The Company recognized a discount for 100% of the principal value of the March Debentures and the Exchange Debentures and non-cash interest expense in the amount of $43.7 million in connection with the recognition of these derivative liabilities. | ||||||||||||||||
February Offering [Member] | |||||||||||||||||
Debt instrument face amount | $ 1,600,000 | ||||||||||||||||
Warrants to purchase common stock | 6,667 | ||||||||||||||||
Warrant exercise price | $ 38.70 | ||||||||||||||||
Warrant purchase price | $ 1,500,000 | ||||||||||||||||
Debt instrument of exchange price | $ 2,500,000 | ||||||||||||||||
March Offerings [Member] | |||||||||||||||||
Debt instrument face amount | $ 10,850,000 | ||||||||||||||||
Debt instrument maturity date | Mar. 21, 2019 | ||||||||||||||||
Proceeds from debt | $ 8,400,000 | ||||||||||||||||
Repayment of debt | 750,000 | ||||||||||||||||
Convertible debt | 2,500,000 | ||||||||||||||||
Interest expenses | 400,000 | ||||||||||||||||
Stock converted into debt | 2,700,000 | ||||||||||||||||
March Offerings [Member] | Series H Convertible Preferred Stock [Member] | |||||||||||||||||
Stock of convertible preferred stock | 2,200,000 | ||||||||||||||||
2017 Diamantis Note [Member] | March Offerings [Member] | |||||||||||||||||
Repayment of debt | $ 3,800,000 | ||||||||||||||||
March Debentures and Exchange Debenture [Member] | March Offerings [Member] | |||||||||||||||||
Warrants to purchase common stock | 9,166,616 | 9,166,616 | 9,166,616 | 9,166,616 | |||||||||||||
Debt instrument maturity date | Mar. 21, 2019 | ||||||||||||||||
Stock converted into debt | $ 548,932 | ||||||||||||||||
Debt original issue discount, percentage | 24.00% | ||||||||||||||||
Debenture description | The March Debentures and Exchange Debentures are convertible into shares of the Company’s common stock, which has been adjusted pursuant to the terms of the March Debentures to $5.85 per share as of September 30, 2017, due to prices at which the Company has subsequently issued shares of common stock). The March Debentures began to amortize monthly commencing on the 90th day following the closing date. The Exchange Debentures began to amortize monthly on the closing date. On each monthly amortization date, the Company may elect to repay 5% of the original principal amount of March Debentures and Exchange Debentures in cash or, in lieu thereof, the conversion price of such debentures will thereafter be 85% of the volume weighted average price at the time of conversion. | ||||||||||||||||
Stock converted into debt, value | 4,100,000 | ||||||||||||||||
Debt instrument original amount | $ 15,300,000 | ||||||||||||||||
March Debentures and Exchange Debenture [Member] | March Offerings [Member] | Series A Warrant [Member] | |||||||||||||||||
Warrants to purchase common stock | 3,214,911 | 3,214,911 | 3,214,911 | 3,214,911 | |||||||||||||
Warrant exercise price | $ 5.85 | $ 5.85 | $ 5.85 | $ 5.85 | |||||||||||||
Warrant term | 5 years | ||||||||||||||||
March Debentures and Exchange Debenture [Member] | March Offerings [Member] | Series B Warrant [Member] | |||||||||||||||||
Warrants to purchase common stock | 2,736,794 | 2,736,794 | 2,736,794 | 2,736,794 | |||||||||||||
Warrant exercise price | $ 5.85 | $ 5.85 | $ 5.85 | $ 5.85 | |||||||||||||
Warrant term | 18 months | ||||||||||||||||
March Debentures and Exchange Debenture [Member] | March Offerings [Member] | Series C Warrant [Member] | |||||||||||||||||
Warrants to purchase common stock | 3,214,911 | 3,214,911 | 3,214,911 | 3,214,911 | |||||||||||||
Warrant exercise price | $ 5.85 | $ 5.85 | $ 5.85 | $ 5.85 | |||||||||||||
Warrant term | 5 years | ||||||||||||||||
June Debentures [Member] | June Offerings [Member] | |||||||||||||||||
Warrants to purchase common stock | 100,000 | ||||||||||||||||
June Offerings [Member] | |||||||||||||||||
Warrants to purchase common stock | 66,667 | 33,333 | |||||||||||||||
Warrant exercise price | $ 5.70 | $ 5.85 | |||||||||||||||
July Offerings [Member] | |||||||||||||||||
Debt instrument face amount | $ 4,136,862 | ||||||||||||||||
Warrants to purchase common stock | 141,333 | ||||||||||||||||
Warrant exercise price | $ 5.63 | $ 5.63 | $ 5.63 | $ 5.63 | |||||||||||||
Debt instrument of exchange price | $ 1,902,700 | ||||||||||||||||
Warrant term | 5 years | ||||||||||||||||
Warrant consideration in cash | $ 2,000,000 | ||||||||||||||||
Reserve stock split, description | 1-for-8 reverse split | ||||||||||||||||
July Offerings [Member] | October 5 2017 [Member] | |||||||||||||||||
Reserve stock split, description | 1-for-15 reverse stock split | ||||||||||||||||
July Debentures [Member] | |||||||||||||||||
Debt instrument of exchange price | $ 6,400,000 | ||||||||||||||||
September Offerings [Member] | |||||||||||||||||
Debt instrument face amount | 2,604,000 | ||||||||||||||||
Debt instrument of exchange price | 4,136,862 | ||||||||||||||||
Interest expenses | $ 1,000,000 | ||||||||||||||||
Debt original issue discount, percentage | 24.00% | 24.00% | 24.00% | 24.00% | |||||||||||||
Debenture description | The September Debentures begin to amortize monthly commencing on the earlier of the 90th day following September 19, 2017 or the effective date of a registration statement covering the shares of common stock issuable upon conversion of the September Debentures. On each monthly amortization date, the Company may elect to repay 5% of the original principal amount of September Debentures in cash or, in lieu thereof, the conversion price of such September Debentures shall thereafter be 85% of the volume weighted average price at the time of conversion. | ||||||||||||||||
Proceeds of offering cost | $ 2,100,000 | ||||||||||||||||
September Offerings [Member] | Series A Warrant [Member] | |||||||||||||||||
Warrants to purchase common stock | 6,935,517 | 2,311,829 | 2,311,829 | 2,311,829 | 2,311,829 | ||||||||||||
Warrant exercise price | $ 3.90 | $ 3.90 | $ 3.90 | $ 3.90 | |||||||||||||
Warrant term | 5 years | ||||||||||||||||
September Offerings [Member] | Series B Warrant [Member] | |||||||||||||||||
Warrants to purchase common stock | 6,935,517 | 2,311,859 | 2,311,859 | 2,311,859 | 2,311,859 | ||||||||||||
Warrant exercise price | $ 3.90 | $ 3.90 | $ 3.90 | $ 3.90 | |||||||||||||
Warrant term | 18 months | ||||||||||||||||
September Offerings [Member] | Series C Warrant [Member] | |||||||||||||||||
Warrants to purchase common stock | 6,935,517 | 2,311,829 | 2,311,829 | 2,311,829 | 2,311,829 | ||||||||||||
Warrant exercise price | $ 3.90 | $ 3.90 | $ 3.90 | $ 3.90 | |||||||||||||
Warrant term | 5 years | ||||||||||||||||
September Debenture [Member] | |||||||||||||||||
Debt instrument of exchange price | $ 6,412,136 | ||||||||||||||||
Amortization amount | $ 100,000 |
Debentures - Schedule of Debent
Debentures - Schedule of Debentures (Details) | Sep. 30, 2017USD ($) |
Debt Disclosure [Abstract] | |
Debentures | $ 20,962,234 |
Discount on Debentures | (16,398,666) |
Deferred financing fees | (324,563) |
Total debentures | 4,239,005 |
Less current portion | |
Debentures | $ 4,239,005 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 9 Months Ended | |||||||
Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | May 31, 2017 | Mar. 15, 2017 | Mar. 07, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | |
Warrant to purchase common stock | 2,056 | |||||||
Debt instrument maturity date | Aug. 31, 2017 | |||||||
Alcimede [Member] | ||||||||
Consulting fee | $ 400,000 | $ 300,000 | ||||||
Monarch Capital LLC [Member] | ||||||||
Consulting fee | $ 100,000 | $ 100,000 | ||||||
Director [Member] | ||||||||
Advance from director | $ 3,600,000 | $ 3,600,000 | ||||||
Accrued but unpaid interest | $ 500,000 | $ 500,000 | ||||||
Debt instrument interest rate | 10.00% | 10.00% | ||||||
Mr Diamantis [Member] | ||||||||
Accrued but unpaid interest | $ 500,000 | |||||||
Debt instrument interest rate | 10.00% | 10.00% | ||||||
Debt face amount | $ 3,800,000 | |||||||
Warrant to purchase common stock | 27,667 | |||||||
Warrant exercise price | $ 15 | |||||||
Due to related party | $ 200,000 | $ 200,000 |
Capital Lease Obligations - Sch
Capital Lease Obligations - Schedule of Capital Leases (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Medical equipment | $ 4,497,025 | $ 4,497,025 |
Less accumulated depreciation | (3,582,631) | (2,809,511) |
Capital lease obligations | $ 914,394 | $ 1,687,514 |
Capital Lease Obligations - Agg
Capital Lease Obligations - Aggregate Future Minimum Rentals Under Capital Leases (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
2017 (October through December) | $ 493,282 | |
2,018 | 1,427,375 | |
2,019 | 377,919 | |
2,020 | 32,611 | |
Total | 2,331,187 | |
Less interest | 103,983 | |
Present value of minimum lease payments | 2,227,204 | |
Less current portion of capital lease obligations | 1,491,666 | $ 1,796,053 |
Capital lease obligations, net of current portion | $ 735,538 | $ 1,774,121 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | Sep. 27, 2017 | Aug. 23, 2017 | Aug. 14, 2017 | Jul. 25, 2017 | Feb. 22, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Mar. 15, 2017 | Mar. 13, 2017 | Feb. 07, 2017 | Dec. 31, 2016 |
Preferred stock shares authorized | 5,000,000 | 5,000,000 | |||||||||
Preferred stock par value | $ 0.01 | ||||||||||
Preferred stock shares outstanding | 1,750,275 | ||||||||||
Number of common stock shares issued, shares | 1,167,479 | ||||||||||
Debt converted into share | 548,932 | ||||||||||
Debt converted into share, value | $ 4,100,000 | ||||||||||
Common stock shares outstanding | 1,354,171 | 186,692 | |||||||||
Shares issued to settle notes and warrants | 26,667 | ||||||||||
Shares issued to settle notes and warrants, value | $ 400,000 | ||||||||||
Warrants to purchase common stock | 2,056 | ||||||||||
Warrants to purchase common stock, value | $ 57,868 | ||||||||||
Common stock shares issued for professional service | 33,334 | ||||||||||
Value of professional service fee | $ 118,493 | $ 161,003 | $ 9,310 | ||||||||
Number of restricted stock shares forfeited and cancelled | 4,933 | ||||||||||
Stock-based compensation | $ 34,081 | 884,165 | |||||||||
Warrant [Member] | |||||||||||
Number of warrant issued | 16,350,132 | ||||||||||
Warrant exercise price per share | $ 5.03 | ||||||||||
Restricted Stock [Member] | |||||||||||
Stock-based compensation | $ 82,974 | ||||||||||
Stock issued price per share | $ 3.75 | ||||||||||
Unrecognized compensation | $ 580,750 | ||||||||||
Stock Options [Member] | |||||||||||
Stock-based compensation | 34,081 | $ 700,000 | |||||||||
2007 Equity Plan [Member] | |||||||||||
Unrecognized compensation | $ 155,582 | ||||||||||
Weighted average period | 1 year 11 days | ||||||||||
Former Employee [Member] | |||||||||||
Number of common stock shares issued, shares | 8,333 | ||||||||||
Number of common stock shares issued, value | $ 42,510 | ||||||||||
Employees and Directors [Member] | |||||||||||
Number of restricted stock issued | 181,933 | ||||||||||
Number of restricted stock returned to treasury | 4,933 | ||||||||||
Employees and Directors [Member] | 2007 Equity Plan [Member] | |||||||||||
Number of restricted stock issued | 181,933 | ||||||||||
Series G Preferred Stock [Member] | |||||||||||
Preferred stock shares authorized | 14,000 | 14,000 | |||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | |||||||||
Preferred stock shares outstanding | 215 | 215 | |||||||||
Preferred stock shares issued | 215 | 215 | |||||||||
Preferred stock value | $ 2 | $ 2 | |||||||||
Series H Preferred Stock [Member] | |||||||||||
Preferred stock shares authorized | 14,202 | 14,202 | |||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | |||||||||
Preferred stock shares outstanding | 60 | 10,019 | |||||||||
Preferred stock shares issued | 60 | 10,019 | |||||||||
Number of common stock shares issued, shares | 7,785 | ||||||||||
Debt converted into share | 370,446 | ||||||||||
Shares converted into debt | 2,174 | ||||||||||
Stock converted into debt | $ 2,200,000 | ||||||||||
Debt converted into share, value | 2,700,000 | ||||||||||
Preferred stock value | $ 100 | ||||||||||
Series F Preferred Stock [Member] | |||||||||||
Preferred stock shares authorized | 1,750,000 | 1,750,000 | |||||||||
Preferred stock par value | $ 0.01 | $ 0.01 | |||||||||
Preferred stock shares outstanding | 1,750,000 | 0 | |||||||||
Preferred stock shares issued | 1,750,000 | 0 | |||||||||
Shares converted into debt | 59,829 | ||||||||||
Debt converted into share, value | $ 174,097 | ||||||||||
Preferred stock value | $ 1,750,000 | $ 17,500 | |||||||||
Series F Preferred Stock [Member] | Genomas, Inc. [Member] | |||||||||||
Preferred stock shares issued | 1,750,000 | ||||||||||
Debt converted into share | 59,829 | ||||||||||
Preferred stock value | $ 174,097 | ||||||||||
Stock conversion price per share | $ 29.25 | ||||||||||
Preferred stock voting rights | one vote | ||||||||||
Preferred stock price per share for unpaid dividend | $ 1.95 | ||||||||||
Reserve Stock Split [Member] | |||||||||||
Number of common stock shares issued, shares | 526 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Option Activity (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Equity [Abstract] | |
Number of Options Outstanding, beginning balance | shares | 47,268 |
Number of Options Granted | shares | |
Number of Options Expired | shares | |
Number of Options Forfeited | shares | (8,790) |
Number of Options Exercised | shares | |
Number of Options Options Outstanding, ending balance | shares | 38,478 |
Number of Options Options Exercisable | shares | 31,811 |
Weighted average exercise price, Outstanding beginning | $ / shares | $ 1,941.45 |
Weighted average exercise price, granted | $ / shares | |
Weighted average exercise price, expired | $ / shares | |
Weighted average exercise price, forfeited | $ / shares | |
Weighted average exercise price, exercised | $ / shares | |
Weighted average exercise price, Outstanding, ending balance | $ / shares | 2,072.75 |
Weighted average exercise price, Exercisable | $ / shares | $ 2,445.84 |
Weighted average contractual term, Options Outstanding, beginning balance | 8 years 11 months 4 days |
Weighted average contractual term, Options Outstanding, beginning balance | 8 years 8 months 5 days |
Stockholders' Equity - Schedu50
Stockholders' Equity - Schedule of Warrant Issued Activity (Details) - Warrant [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Warrants outstanding, beginning balance | shares | 93,843 |
Warrants issued | shares | 17,900,999 |
Warrants exchanged/exercised | shares | (6,500) |
Warrants expired | shares | |
Warrants outstanding, ending balance | shares | 17,988,342 |
Weighted average exercise price, warrants outstanding, beginning balance | $ / shares | $ 175.50 |
Weighted average exercise price, warrants issued | $ / shares | 4.58 |
Weighted average exercise price, Warrants exchanged/exercised | $ / shares | |
Weighted average exercise price, Warrants expired | $ / shares | |
Weighted average exercise price, warrants outstanding, ending balance | $ / shares | $ 5.40 |
Stockholders' Equity - Schedu51
Stockholders' Equity - Schedule of Anti-Dilutive (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Antidilutive securities | 22,451,865 | 178,807 |
Warrant [Member] | ||
Antidilutive securities | 17,988,342 | 78,102 |
Convertible Preferred Stock [Member] | ||
Antidilutive securities | 71,147 | 47,463 |
Convertible Debt [Member] | ||
Antidilutive securities | 4,353,898 | 3,911 |
Stock Options [Member] | ||
Antidilutive securities | 38,478 | 49,331 |
Supplemental Disclosure of Ca52
Supplemental Disclosure of Cash Flow Information - Schedule of Supplemental Cash Flow Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | ||
Cash paid for interest | $ 1,106,835 | $ 1,237,622 |
Cash paid for income taxes | 506,313 | |
Services and severance settled through issuance of common stock | 161,003 | 2,131,829 |
Exchange of convertible debentures for convertible debentures and warrants | 10,734,336 | |
Series F Preferred Stock issued for business acquisition | 174,097 | |
Note payable and warrants settled through issuance of common stock | 440,000 | |
Convertible debenture issued in exchange of Series H Preferred Stock | 2,695,760 | |
Debentures converted into common stock | 4,064,162 | |
Deemed dividend for trigger of down round provision feature | $ 53,341,619 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Feb. 15, 2017 | Feb. 08, 2017 | Jan. 03, 2017 | Sep. 27, 2016 | Feb. 28, 2017 | Dec. 31, 2016 | Feb. 29, 2016 | Feb. 28, 2017 | Mar. 24, 2017 | Dec. 07, 2016 | Oct. 31, 2016 | Sep. 30, 2016 | Jul. 29, 2016 | Jun. 30, 2016 |
Income tax penalties and interest accrued | $ 400,000 | |||||||||||||
Florida Department of Revenue [Member] | ||||||||||||||
Settlement payable | $ 300,000 | |||||||||||||
Income tax penalties and interest paid | 250,000 | |||||||||||||
Income tax penalties and interest accrued | $ 900,000 | |||||||||||||
TCS-Florida, L.P [Member] | ||||||||||||||
Litigation Settlement in judgment | $ 2,600,000 | |||||||||||||
Payment in settlement of judgment | $ 700,000 | |||||||||||||
DeLage Landen Financial Services, Inc. [Member] | ||||||||||||||
Litigation Settlement in judgment | $ 1,000,000 | |||||||||||||
Implicit interest rate | 4.97% | |||||||||||||
Epinex Diagnostics Laboratories, Inc. [Member] | ||||||||||||||
Payment of attorneys’ fees | $ 300,000 | $ 700,000 | ||||||||||||
Medytox Solutions, Inc [Member] | Internal Revenue Service (IRS) [Member] | ||||||||||||||
Settlement payable | $ 100,000 | |||||||||||||
Income tax penalties and interest paid | $ 5,000,000 | |||||||||||||
Income tax liability refund | $ 1,900,000 | |||||||||||||
Settlement Agreement [Member] | Epinex Diagnostics Laboratories, Inc. [Member] | ||||||||||||||
Settlement payable | $ 200,000 | |||||||||||||
Stipulation Agreement [Member] | Florida Department of Revenue [Member] | ||||||||||||||
Monthly installment payment | $ 35,000 | |||||||||||||
Forbearance Agreement [Member] | TCS-Florida, L.P [Member] | ||||||||||||||
Monthly installment payment | $ 1,900,000 |
Segment Information (Details Na
Segment Information (Details Narrative) | 9 Months Ended |
Sep. 30, 2017Integer | |
Segment Reporting [Abstract] | |
Number of reportable segments | 4 |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | ||
Net revenues - External | $ 1,414,211 | $ 41,362 | $ 3,312,476 | $ 4,067,562 | ||
Net revenues - Intersegment | [1] | 217,431 | 502,055 | 501,924 | 1,036,396 | |
(Loss) income from operations | (5,163,488) | (11,524,775) | (13,695,697) | (21,349,985) | ||
Depreciation and amortization | 451,597 | 680,579 | 1,508,042 | 2,037,910 | ||
Capital expenditures | 160,413 | 1,554,499 | 15,998 | |||
Total assets | 6,365,933 | 6,482,393 | 6,365,933 | 6,482,393 | $ 6,482,393 | |
Clinical Laboratory Operations [Member] | ||||||
Net revenues - External | 586,663 | (9,085) | 1,994,639 | 3,491,987 | ||
Net revenues - Intersegment | ||||||
(Loss) income from operations | (1,039,118) | (7,364,096) | (3,809,146) | (10,590,435) | ||
Depreciation and amortization | 410,801 | 549,748 | 1,265,174 | 1,646,167 | ||
Capital expenditures | 6,000 | |||||
Total assets | 1,686,167 | 3,986,126 | 1,686,167 | 3,986,126 | ||
Supportive Software Solutions [Member] | ||||||
Net revenues - External | 208,070 | 50,447 | 698,359 | 605,575 | ||
Net revenues - Intersegment | [1] | 217,431 | 502,055 | 501,924 | 1,036,396 | |
(Loss) income from operations | (660,800) | (1,253,386) | (1,721,694) | (3,800,893) | ||
Depreciation and amortization | 25,015 | 163,749 | 227,999 | 490,236 | ||
Capital expenditures | 9,998 | |||||
Total assets | 1,767,251 | 2,602,428 | 1,767,251 | 2,602,428 | ||
Hospital Operations [Member] | ||||||
Net revenues - External | 619,478 | 619,478 | ||||
Net revenues - Intersegment | ||||||
(Loss) income from operations | (2,093,805) | (3,114,473) | ||||
Depreciation and amortization | 15,436 | 22,045 | ||||
Capital expenditures | 160,413 | 1,554,499 | ||||
Total assets | 1,748,986 | 1,748,986 | ||||
Corporate [Member] | ||||||
Net revenues - External | ||||||
Net revenues - Intersegment | ||||||
(Loss) income from operations | (1,369,765) | (2,940,956) | (5,058,565) | (7,059,644) | ||
Depreciation and amortization | 345 | 745 | 1,005 | 2,494 | ||
Capital expenditures | ||||||
Total assets | 3,037,112 | 2,130,191 | 3,037,112 | 2,130,191 | ||
Eliminations [Member] | ||||||
Net revenues - External | ||||||
Net revenues - Intersegment | ||||||
(Loss) income from operations | 33,663 | 8,181 | 100,987 | |||
Depreciation and amortization | (33,663) | (8,181) | (100,987) | |||
Capital expenditures | ||||||
Total assets | (2,871,080) | (2,711,014) | (2,871,080) | (2,711,014) | ||
Decision Support And Informatics [Member] | ||||||
Total assets | 60,000 | 60,000 | ||||
Assets of AMSG Classified As Held For Sale[Member] | ||||||
Total assets | $ 997,497 | $ 414,662 | $ 997,497 | $ 414,662 | ||
[1] | Intersegment revenues are eliminated in consolidation. |
Discontinued Operations (Detail
Discontinued Operations (Details Narrative) - USD ($) | Sep. 27, 2017 | Jul. 19, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 26, 2016 |
Equity ownership percentage | 20.00% | ||||
Notes payable | |||||
Indebtedness and other obligations | 6,000,000 | ||||
Due to related party | 6,900,000 | ||||
Number of common shares issued upon conversion, value | 4,100,000 | ||||
Series F Preferred Stock [Member] | |||||
Preferred stock stated value | $ 1,750,000 | $ 17,500 | |||
Conversion price per share | $ 29.25 | ||||
Number of common shares issued upon conversion, shares | 59,829 | ||||
Number of common shares issued upon conversion, value | $ 174,097 | ||||
Genomas, Inc. [Member] | |||||
Cash | $ 250,000 | ||||
Due to related party | $ 400,000 | ||||
Genomas, Inc. [Member] | Hartford Healthcare Corporation [Member] | |||||
Equity ownership percentage | 15.00% | ||||
Notes payable | $ 1,500,000 | ||||
Genomas, Inc. [Member] | Series F Preferred Stock [Member] | |||||
Preferred stock stated value | $ 174,097 | ||||
Stock Purchase Agreement [Member] | Genomas, Inc. [Member] | |||||
Equity ownership percentage | 85.00% | ||||
Indebtedness and other obligations | $ 800,000 | ||||
Stock Purchase Agreement [Member] | Genomas, Inc. [Member] | Series F Preferred Stock [Member] | |||||
Preferred stock shares designated | 1,750,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Discontinued Operation of Balance Sheet and Operation Statement (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |||
Cash | $ 8,690 | $ 2,962 | |
Accounts receivable, net | 6,503 | 267,681 | |
Prepaid expenses and other current assets | 53,582 | 67,257 | |
Current assets classified as held for sale | 68,775 | 337,900 | |
Property and equipment, net | 53,012 | ||
Goodwill | 914,972 | ||
Deposits | 13,750 | 23,750 | |
Non-current assets classified as held for sale | 928,722 | 76,762 | |
Accounts payable (includes related parties) | 837,989 | 422,864 | |
Accrued expenses | 253,991 | 1,253,117 | |
Current portion of notes payable | 276,632 | ||
Current liabilities classified as held for sale | 1,368,612 | 1,675,981 | |
Non-current liabilities classified as held for sale | $ 26,598 | ||
Revenue from services | 224,224 | $ 1,154,967 | |
Cost of services | 9,282 | 162,266 | |
Gross profit | 214,942 | 992,701 | |
Operating expenses | 1,225,638 | 4,073,873 | |
Other income (expenses) | 42,775 | (253,142) | |
Loss from discontinued operations | $ (1,053,471) | $ (2,828,030) |
Discontinued Operations - Sch58
Discontinued Operations - Schedule of Fair Value of Acquired Assets and Liabilities Acquisition (Details) - Genomas, Inc. [Member] | Sep. 27, 2017USD ($) |
Cash | $ 7,990 |
Accounts receivable, net | 6,503 |
Accounts payable and accrued expenses | (458,736) |
Deferred revenue | (20,000) |
Loans payable short-term | (142,514) |
Note payable long-term | (134,118) |
Total identifiable net liabilities | (740,875) |
Goodwill | 914,972 |
Total consideration | $ 174,097 |
Discontinued Operations - Sch59
Discontinued Operations - Schedule of Pro Forma Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Discontinued Operations - Schedule Of Pro Forma Information Details | ||||
Net Revenue | $ 1,439,151 | $ 122,432 | $ 3,460,125 | $ 4,251,890 |
Loss from discontinued operations | (475,065) | 452,083 | (1,070,620) | (1,871,057) |
Net loss | (10,930,151) | (10,770,201) | (31,189,252) | (21,158,568) |
Deemed dividend from triggher of down round provision feature | (2,280,280) | (53,341,619) | ||
Net loss to common shareholders | $ (13,210,431) | $ (10,770,201) | $ (84,530,871) | $ (21,158,568) |
Loss per share – discontinued operations | $ (0.40) | $ 4.92 | $ (1.57) | $ (35.71) |
Net loss per common share | $ (10.99) | $ (117.32) | $ (123.69) | $ (403.88) |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Oct. 30, 2017 | Apr. 18, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Feb. 07, 2017 | Dec. 31, 2016 |
Stockholders' deficit | $ (18,788,423) | $ (14,885,896) | ||||
Preferred stock shares authorized | 5,000,000 | 5,000,000 | ||||
Number of shares issued shares | 1,167,479 | |||||
Subsequent Event [Member] | ||||||
Nasdaq capital market's listing rule description | The Company was notified by Nasdaq that the stockholders equity balance reported on the Companys Form 10-K for the year ended December 31, 2016 fell below the $2.5 million minimum requirement for continued listing under the Nasdaq Capital Markets Listing Rule 5550(b)(1) (the Rule). | |||||
Stockholders' deficit | $ 18,800,000 | |||||
Shares issued upon conversion of debentures and exercise of warrants | 4,300,000 | |||||
Subsequent Event [Member] | March Debentures [Member] | ||||||
Number of shares authorized value | $ 633,000 | |||||
Debt instrument face amount | $ 2,185,464 | |||||
Number of shares issued shares | 1,924,037 | |||||
Subsequent Event [Member] | Series I-1 Convertible Preferred Stock [Member] | ||||||
Conversion price per share | $ 1 | |||||
Number of shares authorized value | $ 4,960,000 | |||||
Proceeds from offering | $ 4,000,000 | |||||
Preferred stock voting rights | The Purchase Agreement gives the investors the right to participate in up to 50% of any offering of common stock or common stock equivalents by the Company. | |||||
Share issued price per share | $ 0.80 | |||||
Preferred stock subscription per share | $ 1 | |||||
Preferred stock shares authorized | 5,000,000 | |||||
Preferred stock value | $ 1,000 | |||||
Debt conversion percentage | 85.00% | |||||
Preferred stock outstanding percentage | 67.00% | |||||
Subsequent Event [Member] | Series I-1 Convertible Preferred Stock [Member] | Maximum [Member] | ||||||
Preferred stock shares designated | 4,960 | |||||
Subsequent Event [Member] | Series I-2 Convertible Preferred Stock [Member] | ||||||
Conversion price per share | $ 1 | |||||
Share issued price per share | 0.80 | |||||
Preferred stock subscription per share | $ 1 | |||||
Preferred stock shares authorized | 5,000,000 | |||||
Preferred stock value | $ 1,000 | |||||
Debt conversion percentage | 85.00% | |||||
Preferred stock outstanding percentage | 67.00% | |||||
Subsequent Event [Member] | Series I-2 Convertible Preferred Stock [Member] | Maximum [Member] | ||||||
Preferred stock shares designated | 12,000 | |||||
Subsequent Event [Member] | Class B Warrant [Member] | ||||||
Warrant to purchase of common stock | 600,000 |