0001079974-18-000526.txt : 20180928 0001079974-18-000526.hdr.sgml : 20180928 20180927212426 ACCESSION NUMBER: 0001079974-18-000526 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 53 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180928 DATE AS OF CHANGE: 20180927 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTMOUNTAIN Co CENTRAL INDEX KEY: 0001421603 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 261315305 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-53030 FILM NUMBER: 181092347 BUSINESS ADDRESS: STREET 1: 181 W. BOARDWALK STREET 2: SUITE 202 CITY: FORT COLLINS STATE: CO ZIP: 80525 BUSINESS PHONE: 970-223-4499 MAIL ADDRESS: STREET 1: 181 W. BOARDWALK STREET 2: SUITE 202 CITY: FORT COLLINS STATE: CO ZIP: 80525 FORMER COMPANY: FORMER CONFORMED NAME: WESTMOUNTAIN ASSET MANAGEMENT INC DATE OF NAME CHANGE: 20071218 10-Q 1 wmco10q_6302018.htm


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended June 30, 2018
 
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

Commission File No. 0-53030

WESTMOUNTAIN COMPANY
(Exact Name of Issuer as specified in its charter)

Colorado
     
26-1315305
(State or other Jurisdiction of Incorporation)
     
(IRS Employer Identification Number)
 
   
3463 Magic Drive, Suite 120
   
   
San Antonio, TX 78229
   
(Address of principal executive offices, including zip code)

(210) 767-2727
(Registrant's telephone number including area code)

(Former Name or Former Address, if Changed Since the Last Report)

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days.    Yes []  No [X]
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(Section 232.405 of this chapter) during the preceding 12 months(or such shorter period that the registrant was required to submit and post such files. Yes [ ]  No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer", "smaller reporting company", and "emerging growth company", in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]
 
Accelerated filer [ ]
Non-accelerated filer  [ ]
 
Smaller reporting company [X]
(Do not check if smaller reporting company)
 
Emerging growth company [ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes []    No [X]

The number of shares outstanding of the registrant's common stock, as of the latest practicable date, September 21, 2018, was 54,798,761.









Form 10-Q
WestMountain Company

TABLE OF CONTENTS

  
  
Page
PART I FINANCIAL INFORMATION
 
     
Item 1.
Financial Statements
 
     
 
Condensed Consolidated Balance Sheets at June 30, 2018 (Unaudited) and December 31, 2017
3
     
 
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
 
 
(Unaudited) for the three and six months ended June 30, 2018 and 2017
4
  
   
 
Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended
 
  
June 30, 2018 and 2017
5
     
 
Notes to the Condensed Consolidated Financial Statements (Unaudited)
6
     
Item 2.
Management's Discussion and Analysis and Plan of Operation
16
     
Item 3. 
Quantitative and Qualitative Disclosures About Market Risk
21
     
Item 4.
Controls and Procedures
21
     
PART II OTHER INFORMATION
 
     
Item 1.
Legal Proceedings
21
     
Item 1A.
Risk Factors
22
     
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
27
     
Item 3.
Defaults Upon Senior Securities
27
     
Item 4.
Mine Safety Disclosures
27
     
Item 5.
Other Information
27
     
Item 6.
Exhibits
27
     
SIGNATURES
28




- 2 -



PART I FINANCIAL INFORMATION

For purposes of this report, unless otherwise indicated or the context otherwise requires, all references herein to "WestMountain Company," "we,"" us," and" our," refer to WestMountain Company, a Colorado corporation, and our wholly-owned subsidiaries CytoBioscience, Inc., SolubleBioscience, Inc. and Cytocentrics Bioscience, GmbH.

Items 1. CONDENSED FINANCIAL STATEMENTS

WestMountain Company
Condensed Consolidated Balance Sheets
(expressed in thousands of U.S. dollars)
 
   
June 30,
   
December 31
 
   
2018
   
2017
 
   
(Unaudited)
       
             
Cash and cash equivalents
 
$
68
   
$
235
 
Accounts receivable, related parties
   
-
     
12
 
Accounts receivable, net
   
21
     
1
 
Other current assets
   
809
     
561
 
Total current assets
   
898
     
809
 
Property and equipment, net of accumulated depreciation of $106 and $-, respectively
   
502
     
-
 
Goodwill
   
6,490
     
-
 
Intangible assets, net
   
25,139
     
-
 
Deposits and other assets
   
14
     
-
 
Total assets
 
$
33,043
   
$
809
 
Liabilities and Stockholders' Equity (Deficit)
               
Current liabilities
               
     Accounts payable and accrued liabilities
 
$
2,525
   
$
292
 
Notes payable, related parties
   
1,123
     
-
 
Notes payable
   
1,113
     
-
 
 Total current liabilities
   
4,761
     
292
 
 Long-term liabilities
               
     Deferred tax liability
   
1,130
     
-
 
     Other long-term liability
   
100
     
-
 
Total liabilities
   
5,991
     
292
 
                 
Stockholders' equity (deficit)
               
Preferred stock, par value $0.10 per share, 1,000,000 shares authorized, none issued and outstanding
   
-
     
-
 
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 54,648,761 and 9,508,539 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively
   
54
     
10
 
Additional paid-in capital
   
29,434
     
480
 
Accumulated (deficit) earnings
   
(2,492
)
   
27
 
Accumulated other comprehensive income (loss)
   
56
     
-
 
Total stockholders' equity (deficit)
   
27,052
     
517
 
Total liabilities and stockholders' equity (deficit)
 
$
33,043
   
$
809
 
 
 
 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


- 3 -


 

WestMountain Company
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(expressed in thousands of U.S. dollars)
 
   
Three Months Ended
June 30,
   
Six Months Ended
June 30,
 
   
2018
   
2017
   
2018
   
2017
 
Revenue:
                       
Equipment sales
 
$
7
   
$
-
   
$
7
   
$
-
 
Contract research
   
117
     
-
     
162
     
-
 
Consumables
   
15
     
-
     
15
     
-
 
Grants
   
131
     
-
     
131
     
-
 
Consulting
   
-
     
41
     
19
     
81
 
     
270
     
41
     
334
     
81
 
Cost of sales
   
88
     
-
     
111
     
-
 
Gross margin
   
182
     
41
     
223
     
81
 
 Research and Development
   
1,674
     
-
     
1,788
     
-
 
 General and administrative
   
560
     
85
     
795
     
178
 
     
2,234
     
85
     
2,583
     
178
 
Loss from operations
   
(2,052
)
   
(44
)
   
(2,360
)
   
(97
)
Other expense (income)
   
442
     
(6
)
   
455
     
(6
)
Net loss before income taxes
   
(2,494
)
   
(38
)
   
(2,815
)
   
(91
)
Income tax benefit
   
184
     
12
     
294
     
23
 
Net loss
   
(2,310
)
   
(26
)
   
(2,521
)
   
(68
)
Impact of foreign currency fluctuations
   
52
     
-
     
56
     
-
 
Comprehensive loss
 
$
(2,258
)
 
$
(26
)
 
$
(2,465
)
 
$
(68
)
                                 
Basic and diluted net loss per share
 
$
(0.04
)
 
$
(0.00
)
 
$
(0.07
)
 
$
(0.01
)
                                 
Basic and diluted weighted average shares outstanding
   
54,329,650
     
9,517,402
     
35,318,535
     
9,517,402
 
 
 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



- 4 -


 

WestMountain Company
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(expressed in thousands of U.S. dollars)
 
 
   
Six Months Ended
June 30,
 
   
2018
   
2017
 
  Cash Flows from Operating Activities
           
     Net loss
 
$
(2,521
)
 
$
(68
)
    Adjustments to reconcile net loss to net cash
               
       provided by (used in) operating activities
               
Depreciation and amortization
   
1,161
     
2
 
Deferred taxes
   
(293
)
   
-
 
Changes in operating assets and liabilities
               
                 
 Accounts and other receivables
   
142
     
(46
)
Prepaid expenses and other current assets
   
219
     
(1
)
Accounts payable and liabilities
   
(424
)
   
5
 
Net cash used in operating activities
   
(1,716
)
   
(108
)
                 
                 
Cash Flows from Financing Activities
               
     Proceeds from the issuance of common stock
   
1,693
     
-
 
Repayments of loans and notes payable
   
(200
)
   
-
 
Net cash provided by financing activities
   
1,493
     
-
 
                 
Effect of Exchange Rate Changes
   
56
     
-
 
             
 
 
Net Change in Cash and Cash Equivalents
   
(167
)
   
(108
)
Cash and Cash Equivalents, beginning of period
   
235
     
685
 
Cash and Cash Equivalents, end of period
 
$
68
   
$
577
 
                 
Supplemental disclosure of cash flow information:
               
   Cash paid during the period for:
               
         Interest
 
$
46
   
$
-
 
                 
Supplemental disclosure of financing activities:
               
    Notes converted and stock exchanged in connection
               
          with the transaction described in Note 2
 
$
30,362
   
$
-
 
 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 

- 5 -


 
WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)
 

1. Nature of Organization and Summary of Significant Accounting Policies

Nature of Organization and Basis of Presentation

WestMountain Company ("we", "our" or the "Company"), was incorporated in the state of Colorado on October 18, 2007 and on this date approved its business plan and commenced operations. The consolidated financial statements include the financial information of WestMountain Company and its wholly owned subsidiaries, CytoBioscience, Inc., SolubleBioscience, Inc. and Cytocentrics Bioscience, GmbH. All significant intercompany accounts and transactions have been eliminated.

On March 19, 2018, we entered into an Agreement of Merger and Plan of Reorganization, dated March 19, 2018, with WASM Acquisition Corp. ("WASM"), a Colorado corporation and a subsidiary of WestMountain, and CytoBioscience, Inc and its subsidiaries ("CytoBioscience"). Pursuant to the terms of the Merger Agreement, on March 19, 2018 (the "Closing Date"), WASM merged with and into CytoBioscience (the "Merger"), with CytoBioscience surviving the Merger and becoming a wholly-owned subsidiary of WestMountain, and the Stockholders of the CytoBioscience became Stockholders of WestMountain. On the Closing Date, all outstanding shares of capital stock of the CytoBioscience were cancelled and exchanged for 42,522,598 newly issued shares of common stock of WestMountain ("Common Stock"). Also, on the Closing Date all outstanding warrants and stock options of CytoBioscience were canceled.

Under U.S. generally accepted accounting principles ("GAAP"), the Merger is treated as a "reverse merger" under the acquisition method of accounting. For accounting purposes, CytoBioscience is considered to have acquired the Company. Consequently, the historical financial statements reflect the operations and financial condition of CytoBioscience and operations of the Company beginning on the closing date of the Merger.
 
As a result of the merger, the Company is now a manufacturer of medical research instrumentation and related consumables (cells, microchips, reagents, etc.). In addition, the Company now provides contract research (CRO) to the drug research and pharmaceutical market, with an emphasis on drug safety and analysis.

Unaudited Financial Information

The accompanying financial information as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 is unaudited. In the opinion of management, all normal and recurring adjustments, which are necessary to provide a fair presentation of the Company's financial position at June 30, 2018 and its operating results for the three and six months ended June 30, 2018 and 2017, have been made. Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in: (i) the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2017 on March 16, 2018; as well as in (ii) the Amendment Number 1 to the Current Report on Form 8-K/A filed with the SEC on August 24, 2018. The results of operations for the three and six months ended June 30, 2018 are not necessarily an indication of operating results to be expected for the year.

Use of Estimates

The preparation of the condensed consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 

 
- 6 -


WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)



Concentrations

During the three months ended June 30, 2018, four customers accounted for 84% of total revenue. During the three months ended June 30, 2017, two related party customers accounted for 93% of total revenue. During the six months ended June 30, 2018, four customers accounted for 68% of revenue. During the six months ended June 30, 2017, two related party customers represented 93% of revenue. At June 30, 2018, one customer accounted for 92% of accounts receivable. At June 30, 2017, two related party customers accounted for 90% of accounts receivable.
 
Foreign Currency Translation

For subsidiaries whose functional currencies are not the U.S. dollar, the Company uses the average exchange rate for the year and the exchange rate at the balance sheet date, to translate the operating results and financial position to U.S. dollar, the reporting currency, respectively. Translation differences are recorded in accumulated other comprehensive income (loss), a component of stockholders' equity (deficit). The foreign currency translation income (loss) included in comprehensive income (loss) was $60 and $- for the three months ended June 30, 2018 and 2017, respectively. The foreign currency translation income (loss) included in comprehensive income (loss) was $56 and $- for the six months ended June 30, 2018 and 2017, respectively.

Going Concern

The consolidated financial statements are prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company anticipates incurring losses for the foreseeable future until such time, if ever, that it generates significant sales from its current products, or products currently in development.

The Company's cash and cash equivalents at June 30, 2018 were $68 which is not sufficient to fund the Company's operations for the next twelve months. Accordingly, the Company will require additional cash to fund and continue its operations. As such the Company expects to seek business combinations which could provide a platform for raising the necessary operating as well as research and development funds required until such point that revenue for sales and services are sufficient to fund such activities. The Company anticipates raising additional funds through collaborative arrangements, public or private sales of debt or equity securities, or some combination thereof. There is no assurance that any such collaborative arrangement will be entered into or that financing will be available when needed in order to allow the Company to continue its operations, or if available, on acceptable terms.

In the event financing is not obtained, the Company may pursue cost cutting measures as well as explore the sale of selected assets to generate additional funds. If required to significantly reduce operating expenses and delay, reduce the scope of, or eliminate any of its development programs or clinical trials, these events could have a material adverse effect on its business, results of operations, and financial condition. These factors raise significant doubt about the Company's ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should it be unable to continue as a going concern.

Accounts Receivable

Accounts receivable are reduced, as needed, by an allowance for doubtful accounts. The allowance for doubtful accounts reflects its best estimate of probable losses determined principally on the basis of historical experience and specific allowances for known troubled accounts. All accounts or portions thereof that are deemed to be uncollectible or to require an excessive collection cost are written off to the allowance for doubtful accounts. The Company determined that an allowance was necessary at June 30, 2018 of $109 representing accounts greater than 90 days. The Company determined that no allowance was necessary at December 31, 2017.
 
 
- 7 -


WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)


Property and Equipment

Laboratory ("Lab") and office equipment is stated at cost less accumulated depreciation.  Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets as indicated in the following table:

Asset Category
No. of Years
   
Office furniture and equipment
3
Laboratory equipment
3-5
Computers and software
3
Leasehold improvements
Shorter of the estimated useful life of the asset or lease term

Expenditures for repair and maintenance, which do not materially extend the useful lives of property and equipment, are charged to expense. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its office equipment for impairment.

Goodwill and Intangible Assets

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but reviewed for impairment on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely-than-not reduce the fair value of the Company's reporting units below their carrying amounts.

The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step impairment test. If the Company elects this option and believes, as a result of the qualitative assessment, that it is more-likely-than-not that the carrying value of goodwill is not recoverable, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. In the first step, the Company compares the fair value of its reporting units to their carrying values. If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the Company's goodwill. If the carrying value of the reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference.

Definite-lived intangible assets, primarily the Company's patented technology, are amortized over the pattern in which the economic benefits of the intangible assets are utilized and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. These assets are currently amortized over 10 years on a straight-line basis. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset, which requires the use of customer attribution rates and other assumptions. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the definite-lived intangible assets, the definite-lived intangible assets are written-down to their fair values.
 
Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, "Impairment or Disposal of Long-Lived Assets." ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. As a result of these reviews, no impairment charge has been recorded for the six months ended June 30, 2018 and 2017, respectively.
 
Revenue Recognition

The Company recognizes revenue when each of the following four criteria is met: 1) a contract or sales arrangement exists; 2) delivery has occurred or services have been rendered; 3) the price of the products or services is fixed or determinable; and 4) collectability is reasonably assured.
 
 

- 8 -



WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)

 
 
Equipment Sales

Revenue from the sale of instrumentation is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from warranties are recognized ratably over the contractual term of the warranty agreement. There was no sale of equipment during the three and six months ended, June 30, 2018 and 2017, respectively. However, the Company received a 12 month warranty from a customer for a previous equipment sale, for which $7 was recognized as revenue for the three months and six months ended June 30, 2018. There was no warranty revenue for the same periods in 2017.
 
Contract Research

Revenue from contract research services is recognized based on a fee per data point at the time services are performed and the final report is issued to the customer. Revenue from contract research was $117 and $-, for the three months ended June 30, 2018 and 2017, respectively. Revenue from contract research was $162 and $-, for the six months ended June 30, 2018 and 2017, respectively.

Consumables

Revenue from the sale of consumables is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from sales of consumables was $15 and $- for the three months and six months ended June 30, 2018 and 2017, respectively.

Grants

Revenue from grants is recognized at the time of funding or over time based on the specific terms of the individual grants. The Company generated $131 income from grants during the three and six months ended, June 30, 2018. The Company did not generate any grant income for the three and six months ended June 30, 2017.

Shipping and Handling Charges

The Company includes the cost of shipping and handling incurred in the importation of goods in cost of sales.

Product Warranty

The Company provides a 6 month limited warranty to the end consumer on all products. The Company does not believe a product warranty reserve is required as of June 30, 2018 or June 30, 2017.

Research and Development

Research and development costs are charged to expense as incurred. Research and development expenses consist primarily of expenditures related to the development of medical research equipment, compensation and consulting costs. The Company incurred research and development expenses of $1,674 and $- for the three months ended June 30, 2018 and 2017, respectively. The Company incurred research and development expenses of $1,788 and $- for the six months ended June 30, 2018 and 2017, respectively.
 
Fair Value of Financial Instruments

Short-term financial instruments, including cash, accounts receivable, accounts payable and other liabilities, consist primarily of instruments with maturities of three months or less when acquired. Management has estimated that the fair values of current assets and current liabilities approximate their reported carrying amounts.
 

 

- 9 -

 

 

WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)


Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible.

The Company is subject to U.S. federal, state, or local income tax examinations by tax authorities for all tax filings since inception.
 
Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (the "FASB") issued ASU 2014-09, Revenue from Contracts with Customers, which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU 2016-08, Revenue Recognition - Principal versus Agent (reporting revenue gross versus net). Also, in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers Identifying Performance Obligations and Licensing, and in May 2016 the FASB issued ASU 2016-12, Revenue Recognition – New Scope Improvements and Practical Expedients. These standards are effective for interim and annual periods beginning after December 15, 2017, and may be adopted earlier. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. The Company has adopted the new standard as of January 1, 2018.

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective for interim and annual periods beginning after December 15, 2018. Early adoption of ASU 2016-02 is permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on the condensed consolidated financial statements.
 
2. Acquisitions

On March 19, 2018, the Company completed the Merger with CytoBioscience, pursuant to which WASM Acquisition Corp. the Company's former wholly owned subsidiary, merged with and into CytoBioscience with CytoBioscience surviving as a wholly owned subsidiary of the Company.

The Company is finalizing the original valuation and as a result there may be possible future adjustments to the purchase price allocation. The purchase was completed by converting common stock, warrants, and preferred stock for equity of approximately $30,362.
 
 
 
- 10 -

 

WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)
 

 
3. Property and Equipment

The following table provides the components of property and equipment:
 
   
June 30,
   
December 31,
 
   
2018
   
2017
 
             
Lab equipment
 
$
550
   
$
-
 
Office and computer equipment
   
36
     
-
 
Leasehold improvements
   
22
     
-
 
     
608
     
-
 
Less: accumulated depreciation and amortization
   
(106
)
   
-
 
                 
Total property and equipment, net
 
$
502
   
$
-
 

Depreciation expense was approximately $90 and $1 for the three months ended, June 30, 2018 and 2017, respectively.  Depreciation expense was approximately $106 and $2 for the six months ended, June 30, 2018 and 2017, respectively.
 
4. Goodwill and Intangible Assets

The following table provides a rollforward of the Company's goodwill:

     
Adjustments to Goodwill
     
 
December 31, 2017
 
Acquisitions
 
June 30, 2018
 
             
Medical research instrumentation and CRO
 
$
-
   
$
6,490
   
$
6,490
 
Gross carrying amount
   
-
     
6,490
     
6,490
 
Accumulated Impairment Loss
   
-
     
-
     
-
 
Goodwill
 
$
-
   
$
6,490
   
$
6,490
 

The following table displays intangible assets:

 
June 30, 2018
 
December 31, 2017
 
 
Gross
 
Accumulated Amortization
 
Net
 
Gross
 
Accumulated Amortization
 
Net
 
                         
Patents
 
$
26,194
   
$
(1,055
)
 
$
25,139
   
$
-
   
$
-
   
$
-
 

Amortization expense was approximately $926 and $- for the three months ended, June 30, 2018 and 2017, respectively.  Amortization expense was approximately $1,055 and $2 for the six months ended, June 30, 2018 and 2017, respectively.

 
- 11 -



WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)


5. Notes Payable
 
In connection with the transaction described in Note 1 and Note 2, the Company assumed the following notes payable.
 
Promissory Note

The Company has a note payable to Skyline Medical, Inc. ("Skyline") with a principal balance at June 30, 2018 of $1,113 bearing interest at 8% per annum. Interest only payments are due monthly with a balloon payment due on February 28, 2020. The Company is currently in default with this note.

Notes Payable – Related Party

Related Party 1

The Company has a note with a related party with a principal balance at June 30, 2018 of $787 bearing interest at 5% per annum. Interest is payable quarterly commencing on May 1, 2018 with a balloon payment due for the principal outstanding on February 26, 2021. Accrued interest at June 30, 2018 was $13. The Company is currently in default with this note.

Related Party 2

The Company has a note with a related party with a principal balance at June 30, 2018 of $336 bearing interest at 5% per annum. Interest and principal due on quarterly basis commencing on May 1, 2018 with a balloon payment due for the principal outstanding on May 1, 2019. Accrued interest at June 30, 2018 was $6. The Company is currently in default with this note.
 
6. Stockholder's Equity

Common Stock

The Company is authorized to issue up to 100 million shares designated as common stock. The common stock has a par value of $0.001 per share.

Warrants

In connection with the merger on March 19, 2018, the Company issued an aggregate of 2,042,382 common stock warrants to investors and placement agents. The warrants were issued with an exercise price of $0.95 per share. Warrants issued and outstanding prior to the merger were canceled.
 


 

- 12 -



WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)


The following table summarizes warrant activity:
 
   
Number of Shares
   
Weighted-average exercise price
   
Weighted-average remaining contractual term (in years)
   
Aggregate intrinsic value (in thousands)
 
                         
Outstanding at December 31, 2017
   
502,113
   
$
0.69
     
5
   
$
-
 
Exercisable at December 31, 2017
   
502,113
   
$
0.69
     
5
   
$
-
 
                                 
Granted
   
2,042,382
     
0.95
     
5
   
$
-
 
Exercised
   
265,800
     
0.95
     
5
   
$
-
 
Canceled
   
502,113
     
0.69
     
5
   
$
-
 
                                 
Outstanding at June 30, 2018
   
1,776,582
   
$
0.95
     
5
   
$
-
 
Exercisable at June 30, 2018
   
1,776,582
   
$
0.95
     
5
   
$
-
 

The fair value of warrants granted were estimated using Black-Scholes option pricing model with the following weighted average assumptions during the six months ended June 30, 2018 when the new warrants were granted.
 
Expected life (in years)
   
5.00
 
Expected volatility
   
67.64%
 
Risk free interest rate
   
2.65%
 
Expected dividend yield
   
-%
 

The fair value of warrants granted are estimated using Black-Scholes option pricing model. The expected warrant term is based on the contractual term.  The stock price is based on a valuation performed by the Company.  The expected volatility was benchmarked against comparable publicly traded companies. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related option at the valuation date. Dividend yield is based on historical trends.

Subsequent to June 30, 2018, warrant holders exercised 150,000 common stock warrants for $143 and accordingly the Company issued 150,000 shares of common stock.

7. Income Taxes

The Company had, subject to limitation as a result of the merger, $17,129 and $- of net operating loss carryforwards at June 30, 2018 and 2017, respectively, which will expire at various dates beginning in 2035 through 2038. In addressing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible.
 
 
 
- 13 -




WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)


The following table provides the components of income (loss) from continuing operations before provision for taxes on income:
 
   
Three Months Ended June 30,
   
Six Months Ended
June 30
 
   
2018
   
2017
   
2018
   
2018
 
                         
Income (loss) from operations before income taxes:
                   
U.S.
 
$
(2,370
)
 
$
(38
)
 
$
(2,693
)
 
$
(91
)
Non-U.S.
   
(124
)
   
-
     
(122
)
   
-
 
                                 
     
(2,494
)
   
(38
)
   
(2,815
)
   
(91
)
                                 
Income Tax Provision:
                               
Current:
                               
Federal
   
-
     
-
     
-
     
-
 
Foreign
   
-
     
-
     
-
     
-
 
State
   
-
     
-
     
-
     
-
 
                                 
Total Current
   
-
     
-
     
-
     
-
 
                                 
Deferred:
                               
Federal
   
180
     
12
     
285
     
23
 
Foreign
   
-
     
-
     
-
     
-
 
State
   
4
     
-
     
9
     
-
 
                                 
Income Tax Benefit
 
$
184
   
$
12
   
$
294
     
23
 
 
Significant components of deferred tax assets and liabilities are as follows:

   
June 30,
2018
   
December 31,
2017
 
             
Deferred tax assets:
           
Net operating loss carryforward
 
$
3,597
   
$
-
 
Allowance for doubtful accounts
   
24
     
-
 
Deferred revenue
   
6
         
Other
   
3
     
-
 
                 
Total deferred tax assets
   
3,630
     
-
 
Less: valuation allowance
   
(3,597
)
   
-
 
                 
Total deferred tax assets
 
$
33
   
$
-
 

Deferred tax liabilities:
           
Intangible assets
 
$
1,094
   
$
-
 
Equipment
   
69
     
-
 
                 
Total deferred tax liabilities
   
1,163
     
-
 
                 
Net deferred tax liabilities
 
$
1,130
   
$
-
 

The Company had an income tax receivable of $31 at June 30, 2018 and December 31, 2017, respectively.
 
 

- 14 -


WestMountain Company
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(expressed in thousands of U.S. dollars)




8. Related Party

The Company is carrying notes payable with two related parties. See Note 4. The Company also earned consulting fees of $- and $40 from related parties for the three months ended June 30, 2018 and 2017, respectively. The Company also earned consulting fees of $19 and $79 for the six months ended June 30, 2018 and 2017, respectively.

9. Commitment and Contingencies

Operating leases

As a result of the merger agreement, the Company entered into lease for office space in Birmingham, AL, Cologne, Germany, and San Antonio, TX. The Company's monthly payments under the lease agreements are approximately $22. Total rent expense for the three months ended June 30, 2018 was approximately $65. Total rent expense for the six months ended June 30, 2018 was $73. There was no rent expense for the three and six months ended June 30, 2017.

Economic Development Grant from the City of San Antonio

On June 11, 2015, the Company entered into an economic development agreement with the City of San Antonio ("City") for $1,000 subject to the Company's commitment to invest significantly in San Antonio with respect to facilities and employment. Accordingly, the City made the first installment of $500 on August 13, 2015. On March 29, 2016, the Company returned $100 of the $500 leaving a remaining balance of $400.

On April 9, 2018, the Company and the City terminated by mutual consent, the economic development agreement. The Company, as part of the termination, agreed to return the $400 over a twenty-four month period with first payment due within 60 days or June 8, 2018. The amount has been accrued and is a component of accounts payable (short-term portion) and other long-term liability (long-term portion) as of June 30, 2018. The Company is currently in default with this agreement, and accordingly, is in negotiation with the City to extend the first repayment installment.

10. Subsequent Events

Warrant Exercise

As referenced in Note 6 above, subsequent to June 30, 2018, warrant holders exercised 150,000 common stock warrants for $143 and accordingly, the Company issued 150,000 shares of common stock.

Legal Dispute with Dr. William Crumb, Director of CRO Services

During January 2018, a legal dispute arose between the Company and Dr. William Crumb, the Company's Director of CRO services. The Company alleged that Dr. Crumb, without proper authorization, had conducted research services using company resources for existing company customers for the benefit of a company not affiliated with CytoBioscience, Inc. His employment was immediately terminated and negotiations for settlement of damages were initiated in earnest.

Effective May 1, 2018, a formal settlement was reached and executed, whereby Dr. Crumb agreed to compensate the Company in the amount of $468 as follows:

·
$300 – to be paid over time from Dr. Crumb's on-going, but new CRO work.
·
$168 – paid from current CRO studies contracted for which one hundred percent (100%) is payable to the Company. This research is expected to be completed by the end of 2018.
 


- 15 -



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

The following discussion of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the consolidated financial statements and notes thereto included in, Item 1 in this Quarterly Report on Form 10-Q.  This item contains forward-looking statements that involve risks and uncertainties.  Actual results may differ materially from those indicated in such forward-looking statements.

Forward-Looking Statements
 
This Quarterly Report on Form 10-Q and the documents incorporated herein by reference contain forward-looking statements. Such forward-looking statements are based on current expectations, estimates, and projections about our industry, management beliefs, and certain assumptions made by our management.  Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," variations of such words, and similar expressions are intended to identify such forward-looking statements.  These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements.  Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.  However, readers should carefully review the risk factors set forth herein and in other reports and documents that we file from time to time with the Securities and Exchange Commission, particularly Annual Reports on Form 10-K, Quarterly reports on Form 10-Q and any Current Reports on Form 8-K.

Merger

On March 19, 2018, we entered into an Agreement of Merger and Plan of Reorganization, dated March 19, 2018, with WASM Acquisition Corp. ("WASM"), a Colorado corporation and a subsidiary of the WestMountain, and CytoBioscience, Inc. and its subsidiaries ("CytoBioscience"). Pursuant to the terms of the Merger Agreement, on March 19, 2018 (the "Closing Date"), WASM merged with and into CytoBioscience (the "Merger"), with CytoBioscience surviving the Merger and becoming a wholly-owned subsidiary of WestMountain, and the Stockholders of the CytoBioscience became Stockholders of WestMountain. On the Closing Date, all outstanding shares of capital stock of the CytoBioscience were cancelled and exchanged for 42,522,598 newly issued shares of common stock of WestMountain. Also, on the Closing Date all outstanding warrants and stock options of CytoBioscience were canceled.

Under U.S. generally accepted accounting principles ("GAAP"), the Merger is treated as a "reverse merger" under the acquisition method of accounting. For accounting purposes, CytoBioscience is considered to have acquired the Company. Consequently, the historical financial statements reflect the operations and financial condition of CytoBioscience and operations of the Company beginning on the closing date of the Merger.

As a result of the merger, the Company is now a manufacturer of medical research instrumentation and related consumables (cells, microchips, reagents, etc.). In addition, the Company now provides contract research (CRO) to the drug research and pharmaceutical market, with an emphasis on drug safety and analysis.

General

The Company is an established, revenue-generating ion channel screening business providing medical instrumentation and research services to organizations in the pharmaceutical and drug research market. The Company develops and manufactures related consumables, including various cell lines, and, further leveraging its instrument, provides Contract Research services for clients worldwide.  Finally, the Company's product line also includes the HSC instrument, which is used to rapidly determine protein solubility; a key component of protein-based drug development.  HSC is manufactured by the Company's wholly-owned subsidiary, Soluble Bioscience.
 
Operations

The Company manufactures medical research instrumentation and related consumables as well as provide research services to organizations in the pharmaceutical and drug research market.
 
 

- 16 -



The Company's cash and cash equivalents at June 30, 2018 were $68,000 which is not sufficient to fund the Company's operations for the next twelve months. Accordingly, the Company will require additional cash to fund and continue its operations. As such the Company expects to seek business combinations which could provide a platform for raising the necessary operating as well as research and development funds required until such point that revenue for sales and services are sufficient to fund such activities. The Company anticipates raising additional funds through collaborative arrangements, public or private sales of debt or equity securities, or some combination thereof. There is no assurance that any such collaborative arrangement will be entered into or that financing will be available when needed in order to allow the Company to continue its operations, or if available, on acceptable terms.

The address of our principal executive office is 3463 Magic Drive, Suite 120, San Antonio, Texas 78229. Our telephone number is (210) 612-2727. Our website is http://www.cytobioscience.com.
 
Our common stock is quoted on the OTC Pink marketplace under the symbol "WASM".

We have not been subject to any bankruptcy, receivership or similar proceedings.

Results of Operations

The following discussion involves our results of operations of the three months ended June 30, 2018 and 2017.

For the three months ended June 30, 2018, the Company generated equipment sales revenue of $7,000 compared to $- for the same period in 2017. The revenue is warranty revenue from a twelve month warranty contract issued to a customer for a previously sold instrument. Warranty revenue is recognized ratably over the term of the contract.

For the three months ended June 30, 2018, the Company generated contract research revenue of $117,000 compared to $- for the same period in 2017.

For the three months ended June 30, 2018, the Company generated consulting revenue of $- compared to $41,000 for the same period in 2017. Of the consulting revenue, $- and $40,000 were from related parties for the three months ended June 30, 2018 and 2017, respectively.

As a result of the merger, consulting operations have been phased out as the Company transitioned to medical research instrumentation and research services. The Company expects significant revenue growth from its instrumentation and research services.

Research and development expenses were $1,674,000 for the three months ended June 30, 2018 compared to $- for the same period in 2017. The Company expects to continue to invest in research and development primarily for its ion channel screening instrumentation and other related equipment and products.

General and administrative expenses were $560,000 for the three months ended June 30, 2018 compared to $85,000 for the same period in 2017. The increase in general and administrative expenses is result of the merger with the addition of operations in multiple sites in the U.S. as well as the research laboratory in Cologne, Germany.

For the three months ended June 30, 2018, the Company had a net loss of $2,310,000 compared to a net loss of $26,000 for the same period in 2017. The increase in the net loss is primarily the result of the merger with increased research and development as well as general and administrative costs.

The following discussion involves our results of operations of the six months ended June 30, 2018 and 2017.

For the six months ended June 30, 2018, the Company generated equipment sales revenue of $7,000 compared to $- for the same period in 2017. The revenue is warranty revenue from a twelve month warranty contract issued to a customer for a previously sold instrument. Warranty revenue is recognized ratably over the term of the contract.
 
 

- 17 -


For the six months ended June 30, 2018, the Company generated contract research revenue of $162,000 compared to $- for the same period in 2017.
 
For the six months ended June 30, 2018, the Company generated consulting revenue of $19,000 compared to $81,000 for the same period in 2017. Of the consulting revenue, $19,000 and $79,000 were from related parties for the six months ended June 30, 2018 and 2017, respectively.

As a result of the merger, consulting operations have been phased out as the Company transitioned to medical research instrumentation and research services. The Company expects significant revenue growth from its instrumentation and research services.

Research and development expenses were $1,788,000 for the six months ended June 30, 2018 compared to $- for the same period in 2017. The Company expects to continue to invest in research and development primarily for its ion channel screening instrumentation and other related equipment and products.

General and administrative expenses were $795,000 for the six months ended June 30, 2018 compared to $178,000 for the same period in 2017. The increase in general and administrative expenses is result of the merger with the addition of operations in multiple sites in the U.S. as well as the research laboratory in Cologne, Germany.

For the six months ended June 30, 2018, the Company had a net loss of $2,521,000 compared to a net loss of $68,000 for the same period in 2017. The increase in the net loss is primarily the result of the merger with increased research and development as well as general and administrative costs.
 
Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to use judgment in the application of accounting policies, including making certain estimates and assumptions. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. These judgments affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied resulting in a different presentation of our financial statements. From time to time, we evaluate our estimates and assumptions. In the event estimates or assumptions prove to be different from actual results, adjustments are made in subsequent periods to reflect more current information. Below is a discussion of accounting policies that we consider critical in that they may require
complex judgment in their application or require estimates about matters that are inherently uncertain.
 
Accounts Receivable

Accounts receivable are reduced, as needed, by an allowance for doubtful accounts. The allowance for doubtful accounts reflects its best estimate of probable losses determined principally on the basis of historical experience and specific allowances for known troubled accounts. All accounts or portions thereof that are deemed to be uncollectible or to require an excessive collection cost are written off to the allowance for doubtful accounts.

Property and Equipment

Lab and office equipment is stated at cost less accumulated depreciation.  Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets as indicated in the following table:
 
Asset Category
No. of Years
   
Office furniture and equipment
3
Laboratory equipment
3-5
Computers and software
3
Leasehold improvements
Shorter of the estimated useful life of the asset or lease term
 
 
 

- 18 -


 
Expenditures for repair and maintenance, which do not materially extend the useful lives of property and equipment, are charged to expense. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its office equipment for impairment.

Goodwill and Intangible Assets

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but reviewed for impairment on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely-than-not reduce the fair value of the Company's reporting units below their carrying amounts.

The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step impairment test. If the Company elects this option and believes, as a result of the qualitative assessment, that it is more-likely-than-not that the carrying value of goodwill is not recoverable, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. In the first step, the Company compares the fair value of its reporting units to their carrying values. If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the Company's goodwill. If the carrying value of the reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference.

Definite-lived intangible assets, primarily the Company's patented technology, are amortized over the pattern in which the economic benefits of the intangible assets are utilized and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. These assets are currently amortized over 10 years on a straight-line basis. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset, which requires the use of customer attribution rates and other assumptions. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the definite-lived intangible assets, the definite-lived intangible assets are written-down to their fair values.
 
Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, "Impairment or Disposal of Long-Lived Assets." ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals.
 
Revenue Recognition

The Company recognizes revenue when each of the following four criteria is met: 1) a contract or sales arrangement exists; 2) delivery has occurred or services have been rendered; 3) the price of the products or services is fixed or determinable; and 4) collectability is reasonably assured.
 
 
- 19 -



Equipment Sales

Revenue from the sale of instrumentation is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from warranties are recognized ratably over the contractual term of the warranty agreement. There was no sale of equipment during the three and six months ended, June 30, 2018 and 2017, respectively. However, the Company received a 12 month warranty from a customer for a previous equipment sale, for which $7 was recognized as revenue for the three months and six months ended June 30, 2018. There was no warranty revenue for the same periods in 2017.

Contract Research

Revenue from contract research services is recognized based on a fee per data point at the time services are performed and the final report is issued to the customer. Revenue from contract research was $117 and $-, for the three months ended June 30, 2018 and 2017, respectively. Revenue from contract research was $162 and $-, for the six months ended June 30, 2018 and 2017, respectively.

Consumables

Revenue from the sale of consumables is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from sales of consumables was $15 and $- for the three months and six months ended June 30, 2018 and 2017, respectively.

Grants

Revenue from grants is recognized at the time of funding or over time based on the specific terms of the individual grants. The Company generated $131 income from grants during the three and six months ended, June 30, 2018. The Company did not generate any grant income for the three and six months ended June 30, 2017.

Shipping and Handling Charges

The Company includes the cost of shipping and handling incurred in the importation of goods in cost of sales.

Product Warranty

The Company provides a 6 month limited warranty to the end consumer on all products. The Company does not believe a product warranty reserve is required as of June 30, 2018 or June 30, 2017.

Research and Development

Research and development costs are charged to expense as incurred. Research and development expenses consist primarily of expenditures related to the development of medical research equipment, compensation and consulting costs. The Company incurred research and development expenses of $1,674,000 and $- for the three months ended June 30, 2018 and 2017, respectively. The Company incurred research and development expenses of $1,788,000 and $- for the six months ended June 30, 2018 and 2017, respectively.
 
Fair Value of Financial Instruments

Short-term financial instruments, including cash, accounts receivable, accounts payable and other liabilities, consist primarily of instruments with maturities of three months or less when acquired. Management has estimated that the fair values of current assets and current liabilities approximate their reported carrying amounts.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible.

The Company is subject to U.S. federal, state, or local income tax examinations by tax authorities for all tax filings since inception.
 
 
 
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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

None.
 
ITEM 4. CONTROLS AND PROCEDURES

Management assessed the effectiveness of the Company's internal control over financial reporting as of June 30, 2018. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Management has concluded that our internal control over financial reporting was not effective as of June 30, 2018 due to the following material weaknesses:

(1) we have not segregated duties as our accountant can initiate and complete transactions in the general ledger system,
 
(2) we have not implemented measures that would prevent the accountant from overriding the internal control system and
 
(3) the chief financial officer is responsible for complex accounting issues without additional review from within the Company.

We do not believe that these control weaknesses have resulted in deficient financial reporting because the chief financial officer is aware of his responsibilities under the SEC reporting requirement and personally certifies the financial reports.

Inherent Limitations Over Internal Controls

Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control Over Financial Reporting

We have made no change in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
 
PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

There are no legal proceedings, to which we are a party, which could have a material adverse effect on our business, financial condition or operating results.
 

 

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ITEM 1A.  RISK FACTORS

Any investment in our common stock involves a high degree of risk.  Investors should carefully consider the risks described below and all of the information contained in this Quarterly Report on Form 10-Q before deciding whether to purchase our common stock.  Our business, financial condition or results of operations could be materially adversely affected by these risks if any of them actually occur.  Our shares of common stock are not currently listed on any national securities exchange. Our shares are quoted on the OTC Pink marketplace, which is a quotation system.   Some of these factors have affected our financial condition and operating results in the past or are currently affecting us.  This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this Quarterly Report on Form 10-Q.
   
Risks Related to our Business and Industry
  
The success of our business depends upon the continuing contributions of our Chief Executive Officer, Chief Science Officer and the head of our Contract Research Operation and other key personnel and our ability to attract other employees to expand our business.

We rely heavily on the services of our board and executive team, as well as other senior management personnel and those we intend to hire. Loss of the services of any of such individuals would adversely impact our operations. In addition, we believe that our technical personnel will represent a significant asset and provide us with a competitive advantage over many of our competitors. We believe that our future success will depend upon our ability to retain these key employees and our ability to attract and retain other skilled financial, engineering, technical and managerial personnel. In addition, if we fail to engage qualified personnel, we may be unable to meet our responsibilities as a public reporting company under the rules and regulations of the Securities and Exchange Commission.

If we are unable to retain or motivate key personnel or hire qualified personnel, we may not be able to grow our business effectively.
 
Our performance is largely dependent on the talents and efforts of highly-skilled individuals. Our future success depends on our continuing ability to identify, hire, develop, motivate and retain highly-skilled personnel for all areas of our organization, as well as to identify, contract with, motivate and retain contract personnel on an outsourced basis for special projects. Our continued ability to compete effectively depends on our ability to attract new employees. As we become a more mature company, we may find our recruiting efforts more challenging.  If we do not succeed in attracting excellent personnel or retaining or motivating existing personnel, we may struggle to grow our business.

The products we intend to market may not be accepted by the market.

Our success depends on the acceptance of our products in the marketplace.  Market acceptance will depend upon several factors, including the interest of consumers and corporations to use our products.  A number of factors may inhibit acceptance of our products, including (i) the existence of competing products, (ii) our inability to convince consumers that they need to pay for the products and services we offer, or (iii) failure of individuals and corporations to use our products.  If our products are not accepted by the market, we may have to curtail our business operations, which could have a material negative effect on operating results and result in a lower stock price.
 
 

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There is significant competition in our market, which could make it difficult to attract customers, cause us to reduce prices and result in reduced gross margins or loss of market share.
 
The market for our products and services is highly competitive, dynamic and subject to frequent technological changes. We expect the intensity of competition and the pace of change to either remain the same or increase in the future. A number of companies may offer products that provide the same or greater functionality than our products. We may not be able to maintain our competitive position against current or potential competitors, especially those with significantly greater financial, marketing, service, support, technical and other resources. Competitors with greater resources may be able to undertake more extensive marketing campaigns, adopt more aggressive pricing policies and make more attractive offers to potential employees, distributors, resellers or other strategic partners. We expect additional competition from other established and emerging companies as the market for our products continues to develop.
 
We may not be able to compete successfully against current and future competitors.
 
We will compete, in our current and proposed businesses, with other companies, some of which have far greater marketing and financial resources and experience than we do. We cannot guarantee that we will be able to penetrate this market and be able to compete at a profit. In addition to established competitors, other companies can easily enter our market and compete with us. Effective competition could result in price reductions, reduced margins or have other negative implications, any of which could adversely affect our business and chances for success. Competition is likely to increase significantly as new companies enter the market and current competitors expand their services. Many of these potential competitors are likely to enjoy substantial competitive advantages, including: larger technical staffs, greater name recognition, larger customer bases and substantially greater financial, marketing, technical and other resources. To be competitive, we must respond promptly and effectively to the challenges of technological change, evolving standards and competitors' innovations by continuing to enhance our services and sales and marketing channels. Any pricing pressures, reduced margins or loss of market share resulting from increased competition or our failure to compete effectively, could seriously damage our business and chances for success.

We plan to grow very rapidly, which will place strains on management and other resources.

We plan to grow rapidly and significantly expand our operations. This growth will place a significant strain on management systems and resources. We will not be able to implement our business strategy in a rapidly evolving market without an effective planning and management process, and, to date, we have not implemented sophisticated managerial, operational and financial systems and controls. We may be required to manage multiple relationships with various strategic partners, technology licensors, users, advertisers and other third parties. These requirements will be strained in the event of rapid growth or in the number of third party relationships, and our systems, procedures or controls may not be adequate to support our operations and management may be unable to manage growth effectively. To manage our expected growth, we will be required to significantly improve or replace existing managerial, financial and operational systems, procedures and controls, and to expand, train and manage our intended growing employee base. We will be required to expand our finance, administrative and operations staff. We may be unable to complete in a timely manner the improvements to our systems, procedures and controls necessary to support future operations, management may be unable to hire, train, retain, motivate and manage required personnel and management may be unable to successfully identify, manage and exploit existing and potential market opportunities.

Our commercial success will depend in part on the ability of the licensor of the technology to maintain protection of their intellectual property.

Our success will depend in part on the ability of the licensor of the technology to maintain or obtain and enforce patent and other intellectual property protection for the technologies and to preserve trade secrets, and to operate without infringing upon the proprietary rights of third parties. We cannot be certain that the creators of the technology were the first inventors of inventions covered by their patent and patent application or that they were the first to file. Accordingly, there can be no assurance that the patent and patent application are valid or will afford us with protection against competitors with similar technology. The failure to obtain or maintain patent or other intellectual property protection on the technologies underlying our licensed biodiesel manufacturing processes may have a material adverse effect on our competitive position and business prospects. It is also possible that the technologies may infringe on patents or other intellectual property rights owned by others. If we are found liable for infringement, we may be liable for significant money damages and may encounter significant delays in bringing products and services to market.
 
 


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If we do not continually introduce new products or enhance our current products, they may become obsolete and we may not be able to compete with other companies.
 
Technology is rapidly evolving. Our ability to compete depends on our ability to develop or license new technologies and products as well as our ability market our current products and services. We may not be able to keep pace with technological advances and our products may become obsolete. In addition, our competitors may develop related or similar products and bring them to market before we do, or do so more successfully, or develop technologies and products more effective than any that we have developed or are developing. If that happens, our business, prospects, results of operations and financial condition may be materially adversely affected.
 
We have no history of marketing our technology which makes it difficult to evaluate our business.

Our limited operating history makes it difficult for prospective investors to evaluate our business. Therefore, our operations are subject to all of the risks inherent in the initial expenses, challenges, complications and delays frequently encountered in connection with the early stages of any new business, as well as those risks that are specific to the biomass and energy industry. Investors should evaluate us in light of the problems and uncertainties frequently encountered by companies attempting to develop markets for new products, services, and technologies. Despite best efforts, we may never overcome these obstacles.

Our business is dependent upon the implementation of our business plan. There can be no assurance that our efforts will be successful or result in continued revenue or profit.

If we do not succeed in our expansion strategy, we may not achieve the results we project.
 
Our business strategy is designed to develop and market our products and services. Our ability to implement our plans will depend primarily on the ability to attract customers and the availability of qualified and cost effective sales personnel. There are no firm agreements for employment of additional marketing personnel, and we can give you no assurance that any of our expansion plans will be successful or that we will be able to establish additional favorable relationships for the marketing and sales of our products and services. We also cannot be certain when, if ever, we will be able to hire the appropriate marketing personnel and establish additional merchandising relationships.
 
Economic conditions could materially adversely affect our business.
 
Our operations and performance depend to some degree on economic conditions and their impact on levels of consumer spending, which have recently deteriorated significantly in many countries and regions, including the regions in which we operate, and may remain depressed for the foreseeable future. For example, some of the factors that could influence the levels of consumer spending include continuing increases in fuel and other energy costs, conditions in the residential real estate and mortgage markets, labor and healthcare costs, access to credit, consumer confidence and other macroeconomic factors affecting consumer spending behavior. These and other economic factors could have a material adverse effect on demand for our products and on our financial condition and operating results.
  
Risks Related to An Investment in Our Securities

If we fail to maintain effective internal controls over financial reporting, the price of our common stock may be adversely affected.

We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require annual assessment of our internal control over financial reporting.  The standards that must be met for management to assess the internal control over financial reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in completing activities necessary to make an assessment of our internal control over financial reporting. If we cannot assess our internal control over financial reporting as effective, investor confidence and share value may be negatively impacted.
 
 
 

- 24 -





In addition, management's assessment of internal controls over financial reporting may identify weaknesses and conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, disclosure of management's assessment of our internal controls over financial reporting, or disclosure of our public accounting firm's attestation to or report on management's assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock.
 
Because of the early stage of development and the nature of our business, our securities are considered highly speculative.

Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of its development. We have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term.   Any profitability in the future from our business will be dependent upon our ability to market the products and to source other acquisitions in the industry we have chosen either additional technologies or exploration projects. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order to continue our business operations.
  
We may, in the future, issue additional common shares that would reduce investors' percent of ownership and may dilute our share value.

The future issuance of common shares may result in substantial dilution in the percentage of our common shares held by our then existing stockholders. We may value any common shares issued in the future on an arbitrary basis. The issuance of common shares for future services or acquisitions or other corporate actions may have the effect of diluting the value of the common shares held by our investors, and might have an adverse effect on any trading market for our common shares.

The Market for Penny Stock has suffered in recent years from patterns of fraud and abuse

Stockholders should be aware that, according to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include: (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons; (iv) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and, (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequential investor losses.

Our common shares are subject to the "Penny Stock" Rules of the SEC, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The SEC has adopted regulations that generally define a "penny stock" to be any equity security other than a security excluded from such definition by Rule 3a51-1 under the Securities Exchange Act of 1934, as amended. For the purposes relevant to our Company, it is any equity security that has a market price of less than $5.00 per share, subject to certain exceptions.

Our common shares are currently regarded as a "penny stock", since our shares are not listed on a national securities exchange or quoted on the NASDAQ Market within the United States, to the extent the market price for its shares is less than $5.00 per share. The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC, to provide a customer with additional information including current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer's account, and to make a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser's written agreement to the transaction.
 
 

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To the extent these requirements may be applicable; they will reduce the level of trading activity in the secondary market for the common shares and may severely and adversely affect the ability of broker-dealers to sell the common shares.
  
FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.
 
In addition to the penny stock rules promulgated by the SEC, which are discussed in the immediately preceding risk factor, FINRA rules require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit the ability to buy and sell our stock and have an adverse effect on the market value for our shares.

Our common stock may experience extreme rises or declines in price, and you may not be able to sell your shares at or above the price paid.

Our common stock may be highly volatile and could be subject to extreme fluctuations in response to various factors, many of which are beyond our control, including (but not necessarily limited to): (i) the trading volume of our shares; (ii) the number of securities analysts, market-makers and brokers following our common stock; (iii) changes in, or failure to achieve, financial estimates by securities analysts; (iv) actual or anticipated variations in quarterly operating results; (v) conditions or trends in our business industries; (vi) announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; (vii) additions or departures of key personnel; (viii) sales of our common stock; and (ix) general stock market price and volume fluctuations of publicly-trading and particularly, microcap companies.

Investors may have difficulty reselling shares of our common stock, either at or above the price they paid for our stock, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our common stock is thinly traded it is particularly susceptible to such changes. These broad market changes may cause the market price of our common stock to decline regardless of how well we perform as a company. In addition, there is a history of securities class action litigation following periods of volatility in the market price of a company's securities. Although there is no such shareholder litigation currently pending or threatened against the Company, such a suit against us could result in the incursion of substantial legal fees, potential liabilities and the diversion of management's attention and resources from our business. Moreover, and as noted below, our shares are currently traded on the OTC-BB and, further, are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to manipulation by market-makers, short-sellers and option traders.

We have not and do not intend to pay any cash dividends on our common shares and, consequently, our stockholders will not be able to receive a return on their shares unless they sell them.

We intend to retain any future earnings to finance the development and expansion of our business. We have not, and do not, anticipate paying any cash dividends on our common shares in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.
 
 

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A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.
 
A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, or convertible debt instruments, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.
 
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the three and six months ended June 30, 2018, warrant holders exercised 265,800 common stock warrants for $253,000 for which the Company issued 265,800 shares of common stock. The proceeds were used for operations.
 
These securities were not registered under the Securities Act of 1933, as amended (the "Securities Act"), but qualified for exemption under Section 4(a)(2) of the Securities Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities by the Company did not involve a "public offering," as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial number of persons involved in the transaction, size of the offering, manner of the offering and number of securities offered. All of the securities were issued without registration under the Securities Act of 1933 in reliance upon the exemption provided in Section 4(a)(2).
 
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.
 
ITEM 4.  MINE SAFETY DISCLOSURES

None.
 
ITEM 5.  OTHER INFORMATION 
 
None.
 
ITEM 6.  EXHIBITS
 
Exhibit
   
 
Filed or
Furnished
Number
 
Exhibit Description
 
 
Herewith
           
 
 
 
X
           
31.2        X
           
 
 
 
X
 
* In accordance with SEC Release 33-8238, Exhibit 32.1 is being furnished and not filed.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized September 27, 2018.

 
 WESTMOUNTAIN COMPANY
   
 
By: /s/ James R. Garvin
 
James R. Garvin, Chief Executive Officer and Director
   
 
By: /s/ Henry C. Bourg
 
Henry C. Bourg, Chief Financial Officer (Principal Accounting and Financial Officer)

 
 

 
 
 
- 28 -
EX-31.1 2 ex31_1.htm

 Exhibit 31.1

 
 
CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
 
     I, James R. Garvin, certify that:

1.   I have reviewed this quarterly report of WestMountain Company on Form 10-Q;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4.   I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))  for the small business issuer and have;

a.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure the material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b.
Designed such internal control over financial reporting, or caused such internal control over  financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.
Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.

d.
Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or person performing the equivalent functions);

a.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process summarize and report financial information; and

b.
  Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal controls over financial reporting.

Date:  September 27, 2018
 
 
 /s/ James R. Garvin
 
James R. Garvin
Chief Executive Officer
   

 

EX-31.2 3 ex31_2.htm
Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302
OF THE SARBANES-OXLEY ACT OF 2002
 
     I, Henry C. Bourg, certify that:

1.   I have reviewed this quarterly report of WestMountain Company on Form 10-Q;

2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this;

3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4.   I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))  for the small business issuer and have;

e.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure the material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

f.
Designed such internal control over financial reporting, or caused such internal control over  financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

g.
Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation.

h.
Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the issuer's auditors and the audit committee of the issuer's board of directors (or person performing the equivalent functions);

c.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer's ability to record, process summarize and report financial information; and

d.
  Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer's internal controls over financial reporting.

Date:  September 27, 2018
 
 
 /s/ Henry C. Bourg
 
Henry C. Bourg
Chief Financial Officer
   

EX-32.1 4 ex32_11.htm

 

                                                                    Exhibit 32.1


CERTIFICATION PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT 0F 2002
 
 
In connection with the Quarterly Report of WestMountain Company (the Company") on Form 10-Q for the period ended herein as filed with the Securities and Exchange Commission (the "Report"), I. James R. Garvin, Chief Executive and Henry C. Bourg , Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that:

     (1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fully presents, in all material respects, the financial condition and results of operations or the Company.

 
 
WESTMOUNTAIN COMPANY
 
 Dated: September 27, 2018
 
 
 
 
By:    
/s/ James R. Garvin
 
 
 
James R. Garvin
Chief Executive Officer
 
 
 
 
By:    
/s/ Henry C. Bourg
 
 
 
Henry C. Bourg
Chief Financial Officer
 




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6 Months Ended
Jun. 30, 2018
Sep. 21, 2018
Document and Entity Information [Abstract]    
Entity Registrant Name Westmountain Company  
Entity Central Index Key 0001421603  
Document Type 10-Q  
Trading Symbol wasm  
Document Period End Date Jun. 30, 2018  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity a Well-known Seasoned Issuer No  
Entity a Voluntary Filer No  
Entity's Reporting Status Current Yes  
Entity Filer Category Smaller Reporting Company  
Entity Common Stock, Shares Outstanding   54,798,761
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2018  
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Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
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Total current assets 898 809
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Accounts payable and accrued liabilities 2,525 292
Notes payable, related party 1,123
Notes payable 1,113
Total current liabilities 4,761 292
Long-term liabilities    
Deferred tax liability 1,130
Other long-term liability 100
Total liabilities 5,991 292
Stockholders' equity (deficit)    
Preferred stock, par value $0.10 per share, 1,000,000 authorized, none issued and outstanding
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 54,648,761 and 9,508,539 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively 54 10
Additional paid-in-capital 29,434 480
Accumulated (deficit) earnings (2,492) 27
Accumulated other comprehensive income (loss) 56
Total stockholders' equity (deficit) 27,052 517
Total liabilities and stockholders' equity (deficit) $ 33,043 $ 809
XML 13 R3.htm IDEA: XBRL DOCUMENT v3.10.0.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Assets    
Accumulated depreciation $ 106 $ 0
Shareholders' Equity:    
Preferred stock, par value per share $ 0.10 $ 0.10
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value per share $ 0.001 $ 0.001
Common stock, shares authorized 100,000,000 100,000,000
Common stock, shares issued 54,382,961 9,508,539
Common stock, shares outstanding 54,382,961 9,508,539
XML 14 R4.htm IDEA: XBRL DOCUMENT v3.10.0.1
Consolidated Statements of Operations and Other Comprehensive Loss - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Revenue:        
Contract research $ 7 $ 7
Advisory/consulting fees, related parties 117 162
Advisory/consulting fees 15 15
Total revenue 131 131
Cost of sales 41 19 81
Gross margin 88 111
Research and Development 182 41 223 81
Selling, general and administrative expenses 1,674 1,788
Operating Expenses 560 85 795 178
Loss from operations (2,052) (44) (2,360) (97)
Other expense 442 (6) 455 (6)
Net loss before income taxes (2,494) (38) (2,815) (91)
Benefit from income taxes 184 12 294 23
Net loss (2,310) (26) (2,521) (68)
Impact of foreign currency fluctuations 52 56
Comprehensive loss $ (2,258) $ (26) $ (2,465) $ (68)
Basic and diluted net loss per share $ (0.04) $ (0.00) $ (0.07) $ (0.01)
Basic and diluted weighted average shares outstanding 54,329,650 9,517,402 35,318,535 9,517,402
XML 15 R5.htm IDEA: XBRL DOCUMENT v3.10.0.1
Condensed Statements of Cash Flows - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net loss $ (2,521) $ (68)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities    
Depreciation and amortization 1,161 2
Deferred taxes (293)
Changes in operating assets and liabilities    
Accounts and other receivables 142 (46)
Prepaid expenses and other current assets 219 (1)
Accounts payable and liabilities (424) 5
Net cash used in operating activities (1,716) (108)
Cash Flows from Financing Activities    
Proceeds from the issuance of common stock 1,693
Repayments of loans and notes payable (200)
Net cash provided by financing activities 1,493
Effect of Exchange Rate Changes 56
Net change in cash and cash equivalents (167) (108)
Cash and cash equivalents, beginning of period 235 685
Cash and cash equivalents, end of period 68 577
Supplemental disclosure of cash flow information:    
Cash paid during the period for Interest 46
Supplemental disclosure of financing activities:    
Notes converted and stock exchanged in connection with the transaction described in Note 2 $ 30,362
XML 16 R6.htm IDEA: XBRL DOCUMENT v3.10.0.1
Nature of Organization and Summary of Significant Accounting Policies
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Organization and Summary of Significant Accounting Policies

1. Nature of Organization and Summary of Significant Accounting Policies

 

Nature of Organization and Basis of Presentation

 

WestMountain Company ("we", "our" or the "Company"), was incorporated in the state of Colorado on October 18, 2007 and on this date approved its business plan and commenced operations. The consolidated financial statements include the financial information of WestMountain Company and its wholly owned subsidiaries, CytoBioscience, Inc., SolubleBioscience, Inc. and Cytocentrics Bioscience, GmbH. All significant intercompany accounts and transactions have been eliminated.

 

On March 19, 2018, we entered into an Agreement of Merger and Plan of Reorganization, dated March 19, 2018, with WASM Acquisition Corp. ("WASM"), a Colorado corporation and a subsidiary of WestMountain, and CytoBioscience, Inc and its subsidiaries ("CytoBioscience"). Pursuant to the terms of the Merger Agreement, on March 19, 2018 (the "Closing Date"), WASM merged with and into CytoBioscience (the "Merger"), with CytoBioscience surviving the Merger and becoming a wholly-owned subsidiary of WestMountain, and the Stockholders of the CytoBioscience became Stockholders of WestMountain. On the Closing Date, all outstanding shares of capital stock of the CytoBioscience were cancelled and exchanged for 42,522,598 newly issued shares of common stock of WestMountain ("Common Stock"). Also, on the Closing Date all outstanding warrants and stock options of CytoBioscience were canceled.

 

Under U.S. generally accepted accounting principles ("GAAP"), the Merger is treated as a "reverse merger" under the acquisition method of accounting. For accounting purposes, CytoBioscience is considered to have acquired the Company. Consequently, the historical financial statements reflect the operations and financial condition of CytoBioscience and operations of the Company beginning on the closing date of the Merger.

 

As a result of the merger, the Company is now a manufacturer of medical research instrumentation and related consumables (cells, microchips, reagents, etc.). In addition, the Company now provides contract research (CRO) to the drug research and pharmaceutical market, with an emphasis on drug safety and analysis.

 

Unaudited Financial Information

 

The accompanying financial information as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 is unaudited. In the opinion of management, all normal and recurring adjustments, which are necessary to provide a fair presentation of the Company's financial position at June 30, 2018 and its operating results for the three and six months ended June 30, 2018 and 2017, have been made. Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in: (i) the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2017 on March 16, 2018; as well as in (ii) the Amendment Number 1 to the Current Report on Form 8-K/A filed with the SEC on August 24, 2018. The results of operations for the three and six months ended June 30, 2018 are not necessarily an indication of operating results to be expected for the year.

 

Use of Estimates

 

The preparation of the condensed consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those

 

Concentrations

 

During the three months ended June 30, 2018, four customers accounted for 84% of total revenue. During the three months ended June 30, 2017, two related party customers accounted for 93% of total revenue. During the six months ended June 30, 2018, four customers accounted for 68% of revenue. During the six months ended June 30, 2017, two related party customers represented 93% of revenue. At June 30, 2018, one customer accounted for 92% of accounts receivable. At June 30, 2017, two related party customers accounted for 90% of accounts receivable.

 

Foreign Currency Translation

 

For subsidiaries whose functional currencies are not the U.S. dollar, the Company uses the average exchange rate for the year and the exchange rate at the balance sheet date, to translate the operating results and financial position to U.S. dollar, the reporting currency, respectively. Translation differences are recorded in accumulated other comprehensive income (loss), a component of stockholders' equity (deficit). The foreign currency translation income (loss) included in comprehensive income (loss) was $60 and $- for the three months ended June 30, 2018 and 2017, respectively. The foreign currency translation income (loss) included in comprehensive income (loss) was $56 and $- for the six months ended June 30, 2018 and 2017, respectively.

 

Going Concern

 

The consolidated financial statements are prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company anticipates incurring losses for the foreseeable future until such time, if ever, that it generates significant sales from its current products, or products currently in development.

 

The Company's cash and cash equivalents at June 30, 2018 were $68 which is not sufficient to fund the Company's operations for the next twelve months. Accordingly, the Company will require additional cash to fund and continue its operations. As such the Company expects to seek business combinations which could provide a platform for raising the necessary operating as well as research and development funds required until such point that revenue for sales and services are sufficient to fund such activities. The Company anticipates raising additional funds through collaborative arrangements, public or private sales of debt or equity securities, or some combination thereof. There is no assurance that any such collaborative arrangement will be entered into or that financing will be available when needed in order to allow the Company to continue its operations, or if available, on acceptable terms.

 

In the event financing is not obtained, the Company may pursue cost cutting measures as well as explore the sale of selected assets to generate additional funds. If required to significantly reduce operating expenses and delay, reduce the scope of, or eliminate any of its development programs or clinical trials, these events could have a material adverse effect on its business, results of operations, and financial condition. These factors raise significant doubt about the Company's ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should it be unable to continue as a going concern.

 

Accounts Receivable

 

Accounts receivable are reduced, as needed, by an allowance for doubtful accounts. The allowance for doubtful accounts reflects its best estimate of probable losses determined principally on the basis of historical experience and specific allowances for known troubled accounts. All accounts or portions thereof that are deemed to be uncollectible or to require an excessive collection cost are written off to the allowance for doubtful accounts. The Company determined that an allowance was necessary at June 30, 2018 of $109 representing accounts greater than 90 days. The Company determined that no allowance was necessary at December 31, 2017.

 

Property and Equipment

 

Laboratory ("Lab") and office equipment is stated at cost less accumulated depreciation.  Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets as indicated in the following table:

 

Asset Category No. of Years
   
Office furniture and equipment 3
Laboratory equipment 3-5
Computers and software 3
Leasehold improvements Shorter of the estimated useful life of the asset or lease term

 

Expenditures for repair and maintenance, which do not materially extend the useful lives of property and equipment, are charged to expense. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its office equipment for impairment.

 

Goodwill and Intangible Assets

 

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but reviewed for impairment on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely-than-not reduce the fair value of the Company's reporting units below their carrying amounts.

 

The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step impairment test. If the Company elects this option and believes, as a result of the qualitative assessment, that it is more-likely-than-not that the carrying value of goodwill is not recoverable, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. In the first step, the Company compares the fair value of its reporting units to their carrying values. If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the Company's goodwill. If the carrying value of the reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference.

 

Definite-lived intangible assets, primarily the Company's patented technology, are amortized over the pattern in which the economic benefits of the intangible assets are utilized and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. These assets are currently amortized over 10 years on a straight-line basis. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset, which requires the use of customer attribution rates and other assumptions. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the definite-lived intangible assets, the definite-lived intangible assets are written-down to their fair values.

 

Impairment of Long-Lived Assets

 

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, "Impairment or Disposal of Long-Lived Assets." ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. As a result of these reviews, no impairment charge has been recorded for the six months ended June 30, 2018 and 2017, respectively.

 

Revenue Recognition

 

The Company recognizes revenue when each of the following four criteria is met: 1) a contract or sales arrangement exists; 2) delivery has occurred or services have been rendered; 3) the price of the products or services is fixed or determinable; and 4) collectability is reasonably assured.

 

Equipment Sales

 

Revenue from the sale of instrumentation is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from warranties are recognized ratably over the contractual term of the warranty agreement. There was no sale of equipment during the three and six months ended, June 30, 2018 and 2017, respectively. However, the Company received a 12 month warranty from a customer for a previous equipment sale, for which $7 was recognized as revenue for the three months and six months ended June 30, 2018. There was no warranty revenue for the same periods in 2017.

 

Contract Research

 

Revenue from contract research services is recognized based on a fee per data point at the time services are performed and the final report is issued to the customer. Revenue from contract research was $117 and $-, for the three months ended June 30, 2018 and 2017, respectively. Revenue from contract research was $162 and $-, for the six months ended June 30, 2018 and 2017, respectively.

 

Consumables

 

Revenue from the sale of consumables is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from sales of consumables was $15 and $- for the three months and six months ended June 30, 2018 and 2017, respectively.

 

Grants

 

Revenue from grants is recognized at the time of funding or over time based on the specific terms of the individual grants. The Company generated $131 income from grants during the three and six months ended, June 30, 2018. The Company did not generate any grant income for the three and six months ended June 30, 2017.

 

Shipping and Handling Charges

 

The Company includes the cost of shipping and handling incurred in the importation of goods in cost of sales.

 

Product Warranty

 

The Company provides a 6 month limited warranty to the end consumer on all products. The Company does not believe a product warranty reserve is required as of June 30, 2018 or June 30, 2017.

 

Research and Development

 

Research and development costs are charged to expense as incurred. Research and development expenses consist primarily of expenditures related to the development of medical research equipment, compensation and consulting costs. The Company incurred research and development expenses of $1,674 and $- for the three months ended June 30, 2018 and 2017, respectively. The Company incurred research and development expenses of $1,788 and $- for the six months ended June 30, 2018 and 2017, respectively.

 

Fair Value of Financial Instruments

 

Short-term financial instruments, including cash, accounts receivable, accounts payable and other liabilities, consist primarily of instruments with maturities of three months or less when acquired. Management has estimated that the fair values of current assets and current liabilities approximate their reported carrying amounts.

 

Income Taxes

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible.

 

The Company is subject to U.S. federal, state, or local income tax examinations by tax authorities for all tax filings since inception.

 

Recently Issued Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (the "FASB") issued ASU 2014-09, Revenue from Contracts with Customers, which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU 2016-08, Revenue Recognition - Principal versus Agent (reporting revenue gross versus net). Also, in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers Identifying Performance Obligations and Licensing, and in May 2016 the FASB issued ASU 2016-12, Revenue Recognition – New Scope Improvements and Practical Expedients. These standards are effective for interim and annual periods beginning after December 15, 2017, and may be adopted earlier. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. The Company has adopted the new standard as of January 1, 2018.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective for interim and annual periods beginning after December 15, 2018. Early adoption of ASU 2016-02 is permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on the condensed consolidated financial statements.

XML 17 R7.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisitions
6 Months Ended
Jun. 30, 2018
Business Combinations [Abstract]  
Acquisitions

2. Acquisitions

 

On March 19, 2018, the Company completed the Merger with CytoBioscience, pursuant to which WASM Acquisition Corp. the Company's former wholly owned subsidiary, merged with and into CytoBioscience with CytoBioscience surviving as a wholly owned subsidiary of the Company.

 

The Company is finalizing the original valuation and as a result there may be possible future adjustments to the purchase price allocation.  The purchase was completed by converting common stock, warrants, and preferred stock for equity of approximately $30,362.

XML 18 R8.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property and Equipment
6 Months Ended
Jun. 30, 2018
Property, Plant and Equipment [Abstract]  
Property and Equipment

3. Property and Equipment

 

The following table provides the components of property and equipment:

 

    March 31,     December 31,  
    2018     2017  
             
Lab equipment   $ 551     $ -  
Office and computer equipment     36       -  
Leasehold improvements     22       -  
      609       -  
Less: accumulated depreciation and amortization     (16 )     -  
                 
Total property and equipment, net   $ 593     $ -  

 

Depreciation expense was approximately $35 and $1 for the three months ended, March 31, 2018 and 2017, respectively.

XML 19 R9.htm IDEA: XBRL DOCUMENT v3.10.0.1
Goodwill and Intangible Assets
6 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets

4. Goodwill and Intangible Assets

 

The following table provides a rollforward of the Company's goodwill:

 

      Adjustments to Goodwill      
  December 31, 2017   Acquisitions   March 31, 2018  
             
Medical research instrumentation and CRO   $ -     $ 6,490     $ 6,490  
Gross carrying amount     -       6,490       6,490  
Accumulated Impairment Loss     -       -       -  
Goodwill   $ -     $ 6,490     $ 6,490  

 

The following table displays intangible assets:

 

  March 31, 2018   December 31, 2017  
  Gross   Accumulated Amortization   Net   Gross   Accumulated Amortization   Net  
                         
Patents   $ 26,194     $ (129 )   $ 26,065     $ -     $ -     $ -  
                                                 

 

Amortization expense related to intangible assets was $129 and $- for the for the three months ended, March 31, 2018 and 2017, respectively.

XML 20 R10.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable
6 Months Ended
Jun. 30, 2018
Debt Disclosure [Abstract]  
Notes Payable

5. Notes Payable

 

In connection with the transaction described in Note 1 and 2, the Company assumed the following notes payable.

 

Promissory Note

 

The Company assumed a promissory note payable to Skyline Medical, Inc. ("Skyline") with a principal balance at March 31, 2018 of $1,113 bearing interest at 8% per annum. Interest only payments are due monthly with a balloon payment due on February 28, 2020.

 

Notes Payable – Related Party

 

Related Party 1

 

The Company assumed a note with a related party with a principal balance at March 31, 2018 of $787 bearing interest at 5% per annum. Interest is payable quarterly commencing on May 1, 2018 with a balloon payment due for the principal outstanding on February 26, 2021. Accrued interest at March 31, 2018 was $3.

 

Related Party 2

 

The Company assumed a note with a related party with a principal balance at March 31, 2018 of $336 bearing interest at 5% per annum. Interest and principal due on quarterly basis commencing on May 1, 2018 with a balloon payment due for the principal outstanding on May 1, 2019. Accrued interest at March 31, 2018 was $1.

XML 21 R11.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders Equity
6 Months Ended
Jun. 30, 2018
Stockholders' Equity Note [Abstract]  
Stockholders Equity

6. Stockholder's Equity

 

Common Stock

 

The Company is authorized to issue up to 100 million shares designated as common stock. The common stock has a par value of $0.001 per share.

 

Warrants

 

In connection with the merger on March 19, 2018, the Company issued an aggregate of 2,042,382 common stock warrants to investors and placement agents. The warrants were issued with an exercise price of $0.95 per share. Warrants issued and outstanding prior to the merger were canceled. 

 

The following table summarizes warrant activity:

 

    Number of Shares     Weighted-average exercise price     Weighted-average remaining contractual term (in years)     Aggregate intrinsic value (in thousands)  
                         
Outstanding at December 31, 2017     502,113     $ 0.69       5     $ -  
Exercisable at December 31, 2017     502,113     $ 0.69       5     $ -  
                                 
Granted     2,042,382       0.95       5     $ -  
Canceled     502,113       0.69       5     $ -  
                                 
Outstanding at March 31, 2018     2,042,382     $ 0.95       5     $ -  
Exercisable at March 31, 2018     2,042,382     $ 0.95       5     $ -  

 

The fair value of warrants granted were estimated using Black-Scholes option pricing model with the following weighted average assumptions during the three months ended March 31, 2018.

 

Expected life (in years)     5.00  
Expected volatility     67.64%  
Risk free interest rate     2.65%  
Expected dividend yield     -%  

 

The fair value of warrants granted are estimated using Black-Scholes option pricing model. The expected warrant term is based on the contractual term.  The stock price is based on a valuation performed by the Company.  The expected volatility was benchmarked against comparable publicly traded companies. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related option at the valuation date. Dividend yield is based on historical trends.

 

Subsequent to March 31, 2018, warrant holders exercised 415,800 common stock warrants for $395 and accordingly the Company issued 415,800 shares of common stock.

XML 22 R12.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes
6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Income Taxes

 

7. Income Taxes

 

The Company had, subject to limitation as a result of the merger, $15,125 and $- of net operating loss carryforwards at March 31, 2018 and 2017, respectively, which will expire at various dates beginning in 2035 through 2038. In addressing the reliability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible.

 

The following table provides the components of income (loss) from continuing operations before provision for taxes on income:

 

Three Months Ended March 31,   2018     2017  
             
Income (loss) from operations before income taxes:        
U.S.   $ (323 )   $ (53 )
Non-U.S.     2       -  
                 
      (321 )     (53 )
                 
Income Tax Provision:                
Current:                
Federal     -       -  
Foreign     -       -  
State     -       -  
                 
Total Current     -       -  
                 
Deferred:                
Federal     105       10  
Foreign     -       -  
State     5       -  
                 
Income Tax Benefit   $ 110     $ 10  

 

Significant components of deferred tax assets and liabilities are as follows:

 

   

March 31,

2018

   

December 31,

2017

 
             
Deferred tax assets:            
Net operating loss carryforward   $ 3,307     $ -  
Allowance for doubtful accounts     24       -  
Deferred revenue     6          
Other     3       -  
                 
Total deferred tax assets     3,340       -  
Less: valuation allowance     (3,307 )     -  
                 
Total deferred tax assets   $ 33     $ -  

Deferred tax liabilities:            
Intangible assets   $ 1,263     $ -  
Equipment     84       -  
                 
Total deferred tax liabilities     1,347       -  
                 
Net deferred tax liabilities   $ 1,314     $ -  

 

The Company had an income tax receivable of $31 at March 31, 2018 and December 31, 2017, respectively.

 

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Related Parties
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Parties

8. Related Party

 

The Company is carrying notes payable with two related parties. See Note 4. The Company also earned consulting fees of $- and $40 from related parties for the three months ended June 30, 2018 and 2017, respectively. The Company also earned consulting fees of $19 and $79 for the six months ended June 30, 2018 and 2017, respectively.

XML 24 R14.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies
6 Months Ended
Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

9. Commitment and Contingencies

 

Operating leases

 

As a result of the merger agreement, the Company entered into lease for office space in Birmingham, AL, Cologne, Germany, and San Antonio, TX. The Company's monthly payments under the lease agreements are approximately $22. Total rent expense for the three months ended June 30, 2018 was approximately $65. Total rent expense for the six months ended June 30, 2018 was $73. There was no rent expense for the three and six months ended June 30, 2017.

 

Economic Development Grant from the City of San Antonio

 

On June 11, 2015, the Company entered into an economic development agreement with the City of San Antonio ("City") for $1,000 subject to the Company's commitment to invest significantly in San Antonio with respect to facilities and employment. Accordingly, the City made the first installment of $500 on August 13, 2015. On March 29, 2016, the Company returned $100 of the $500 leaving a remaining balance of $400.

 

On April 9, 2018, the Company and the City terminated by mutual consent, the economic development agreement. The Company, as part of the termination, agreed to return the $400 over a twenty-four month period with first payment due within 60 days or June 8, 2018. The amount has been accrued and is a component of accounts payable (short-term portion) and other long-term liability (long-term portion) as of June 30, 2018. The Company is currently in default with this agreement, and accordingly, is in negotiation with the City to extend the first repayment installment.

XML 25 R15.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Event
6 Months Ended
Jun. 30, 2018
Subsequent Events [Abstract]  
Subsequent Event

10. Subsequent Events

 

Warrant Exercise

 

As referenced in Note 6 above, subsequent to June 30, 2018, warrant holders exercised 150,000 common stock warrants for $143 and accordingly, the Company issued 150,000 shares of common stock.

 

Legal Dispute with Dr. William Crumb, Director of CRO Services

 

During January 2018, a legal dispute arose between the Company and Dr. William Crumb, the Company's Director of CRO services. The Company alleged that Dr. Crumb, without proper authorization, had conducted research services using company resources for existing company customers for the benefit of a company not affiliated with CytoBioscience, Inc. His employment was immediately terminated and negotiations for settlement of damages were initiated in earnest.

 

Effective May 1, 2018, a formal settlement was reached and executed, whereby Dr. Crumb agreed to compensate the Company in the amount of $468 as follows:

 

· $300 – to be paid over time from Dr. Crumb's on-going, but new CRO work.
· $168 – paid from current CRO studies contracted for which one hundred percent (100%) is payable to the Company. This research is expected to be completed by the end of 2018.

XML 26 R16.htm IDEA: XBRL DOCUMENT v3.10.0.1
Nature of Organization and Summary of Significant Accounting Policies (Policy)
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Organization and Basis of Presentation

Nature of Organization and Basis of Presentation

 

WestMountain Company ("we", "our" or the "Company"), was incorporated in the state of Colorado on October 18, 2007 and on this date approved its business plan and commenced operations. The consolidated financial statements include the financial information of WestMountain Company and its wholly owned subsidiaries, CytoBioscience, Inc., SolubleBioscience, Inc. and Cytocentrics Bioscience, GmbH. All significant intercompany accounts and transactions have been eliminated.

 

On March 19, 2018, we entered into an Agreement of Merger and Plan of Reorganization, dated March 19, 2018, with WASM Acquisition Corp. ("WASM"), a Colorado corporation and a subsidiary of WestMountain, and CytoBioscience, Inc and its subsidiaries ("CytoBioscience"). Pursuant to the terms of the Merger Agreement, on March 19, 2018 (the "Closing Date"), WASM merged with and into CytoBioscience (the "Merger"), with CytoBioscience surviving the Merger and becoming a wholly-owned subsidiary of WestMountain, and the Stockholders of the CytoBioscience became Stockholders of WestMountain. On the Closing Date, all outstanding shares of capital stock of the CytoBioscience were cancelled and exchanged for 42,522,598 newly issued shares of common stock of WestMountain ("Common Stock"). Also, on the Closing Date all outstanding warrants and stock options of CytoBioscience were canceled.

 

Under U.S. generally accepted accounting principles ("GAAP"), the Merger is treated as a "reverse merger" under the acquisition method of accounting. For accounting purposes, CytoBioscience is considered to have acquired the Company. Consequently, the historical financial statements reflect the operations and financial condition of CytoBioscience and operations of the Company beginning on the closing date of the Merger.

 

As a result of the merger, the Company is now a manufacturer of medical research instrumentation and related consumables (cells, microchips, reagents, etc.). In addition, the Company now provides contract research (CRO) to the drug research and pharmaceutical market, with an emphasis on drug safety and analysis.

Unaudited Financial Information

Unaudited Financial Information

 

The accompanying financial information as of June 30, 2018 and for the three and six months ended June 30, 2018 and 2017 is unaudited. In the opinion of management, all normal and recurring adjustments, which are necessary to provide a fair presentation of the Company's financial position at June 30, 2018 and its operating results for the three and six months ended June 30, 2018 and 2017, have been made. Certain information and footnote data necessary for a fair presentation of financial position and results of operations in conformity with accounting principles generally accepted in the United States of America have been condensed or omitted. It is therefore suggested that these financial statements be read in conjunction with the summary of significant accounting policies and notes to financial statements included in: (i) the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") for the year ended December 31, 2017 on March 16, 2018; as well as in (ii) the Amendment Number 1 to the Current Report on Form 8-K/A filed with the SEC on August 24, 2018. The results of operations for the three and six months ended June 30, 2018 are not necessarily an indication of operating results to be expected for the year.

Use of Estimates

Use of Estimates

 

The preparation of the condensed consolidated financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Concentrations

Concentrations

 

During the three months ended June 30, 2018, four customers accounted for 84% of total revenue. During the three months ended June 30, 2017, two related party customers accounted for 93% of total revenue. During the six months ended June 30, 2018, four customers accounted for 68% of revenue. During the six months ended June 30, 2017, two related party customers represented 93% of revenue. At June 30, 2018, one customer accounted for 92% of accounts receivable. At June 30, 2017, two related party customers accounted for 90% of accounts receivable.

Foreign currency translation

Foreign Currency Translation

 

For subsidiaries whose functional currencies are not the U.S. dollar, the Company uses the average exchange rate for the year and the exchange rate at the balance sheet date, to translate the operating results and financial position to U.S. dollar, the reporting currency, respectively. Translation differences are recorded in accumulated other comprehensive income (loss), a component of stockholders' equity (deficit). The foreign currency translation income (loss) included in comprehensive income (loss) was $60 and $- for the three months ended June 30, 2018 and 2017, respectively. The foreign currency translation income (loss) included in comprehensive income (loss) was $56 and $- for the six months ended June 30, 2018 and 2017, respectively.

Going Concern

Going Concern

 

The consolidated financial statements are prepared on the basis that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company anticipates incurring losses for the foreseeable future until such time, if ever, that it generates significant sales from its current products, or products currently in development.

 

The Company's cash and cash equivalents at June 30, 2018 were $68 which is not sufficient to fund the Company's operations for the next twelve months. Accordingly, the Company will require additional cash to fund and continue its operations. As such the Company expects to seek business combinations which could provide a platform for raising the necessary operating as well as research and development funds required until such point that revenue for sales and services are sufficient to fund such activities. The Company anticipates raising additional funds through collaborative arrangements, public or private sales of debt or equity securities, or some combination thereof. There is no assurance that any such collaborative arrangement will be entered into or that financing will be available when needed in order to allow the Company to continue its operations, or if available, on acceptable terms.

 

In the event financing is not obtained, the Company may pursue cost cutting measures as well as explore the sale of selected assets to generate additional funds. If required to significantly reduce operating expenses and delay, reduce the scope of, or eliminate any of its development programs or clinical trials, these events could have a material adverse effect on its business, results of operations, and financial condition. These factors raise significant doubt about the Company's ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should it be unable to continue as a going concern.

Accounts Receivable

Accounts Receivable

 

Accounts receivable are reduced, as needed, by an allowance for doubtful accounts. The allowance for doubtful accounts reflects its best estimate of probable losses determined principally on the basis of historical experience and specific allowances for known troubled accounts. All accounts or portions thereof that are deemed to be uncollectible or to require an excessive collection cost are written off to the allowance for doubtful accounts. The Company determined that an allowance was necessary at June 30, 2018 of $109 representing accounts greater than 90 days. The Company determined that no allowance was necessary at December 31, 2017.

Property, plant and equipment

Property and Equipment

 Laboratory ("Lab") and office equipment is stated at cost less accumulated depreciation.  Depreciation is calculated on the straight-line basis over the estimated useful lives of the assets as indicated in the following table:

 

Asset Category No. of Years
   
Office furniture and equipment 3
Laboratory equipment 3-5
Computers and software 3
Leasehold improvements Shorter of the estimated useful life of the asset or lease term

 

Expenditures for repair and maintenance, which do not materially extend the useful lives of property and equipment, are charged to expense. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its office equipment for impairment.

 

Goodwill and Intangible Assets

Goodwill and Intangible Assets

 

Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but reviewed for impairment on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely-than-not reduce the fair value of the Company's reporting units below their carrying amounts.

 

The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the two-step impairment test. If the Company elects this option and believes, as a result of the qualitative assessment, that it is more-likely-than-not that the carrying value of goodwill is not recoverable, the quantitative two-step impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative two-step impairment test. In the first step, the Company compares the fair value of its reporting units to their carrying values. If the carrying values of the net assets assigned to the reporting units exceed the fair values of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the Company's goodwill. If the carrying value of the reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference.

 

Definite-lived intangible assets, primarily the Company's patented technology, are amortized over the pattern in which the economic benefits of the intangible assets are utilized and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets or asset group may not be recoverable. These assets are currently amortized over 10 years on a straight-line basis. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset, which requires the use of customer attribution rates and other assumptions. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the definite-lived intangible assets, the definite-lived intangible assets are written-down to their fair values.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

 

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, "Impairment or Disposal of Long-Lived Assets." ASC 360-10-15 requires the Company to group assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis or appraisals. As a result of these reviews, no impairment charge has been recorded for the six months ended June 30, 2018 and 2017, respectively.

Revenue Recognition

Revenue Recognition

 

The Company recognizes revenue when each of the following four criteria is met: 1) a contract or sales arrangement exists; 2) delivery has occurred or services have been rendered; 3) the price of the products or services is fixed or determinable; and 4) collectability is reasonably assured.

 

Equipment Sales

 

Revenue from the sale of instrumentation is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from warranties are recognized ratably over the contractual term of the warranty agreement. There was no sale of equipment during the three and six months ended, June 30, 2018 and 2017, respectively. However, the Company received a 12 month warranty from a customer for a previous equipment sale, for which $7 was recognized as revenue for the three months and six months ended June 30, 2018. There was no warranty revenue for the same periods in 2017.

 

Contract Research

 

Revenue from contract research services is recognized based on a fee per data point at the time services are performed and the final report is issued to the customer. Revenue from contract research was $117 and $-, for the three months ended June 30, 2018 and 2017, respectively. Revenue from contract research was $162 and $-, for the six months ended June 30, 2018 and 2017, respectively.

 

Consumables

 

Revenue from the sale of consumables is recognized at the time of shipment to the customer, provided no significant vendor obligations remain and collectability is probable. Revenue from sales of consumables was $15 and $- for the three months and six months ended June 30, 2018 and 2017, respectively.

 

Grants

 

Revenue from grants is recognized at the time of funding or over time based on the specific terms of the individual grants. The Company generated $131 income from grants during the three and six months ended, June 30, 2018. The Company did not generate any grant income for the three and six months ended June 30, 2017.

Shipping and Handling Costs

Shipping and Handling Charges

 

The Company includes the cost of shipping and handling incurred in the importation of goods in cost of sales.

Product Warranty

Product Warranty

 

The Company provides a 6 month limited warranty to the end consumer on all products. The Company does not believe a product warranty reserve is required as of June 30, 2018 or June 30, 2017.

Research and development

 

Research and Development

 

Research and development costs are charged to expense as incurred. Research and development expenses consist primarily of expenditures related to the development of medical research equipment, compensation and consulting costs. The Company incurred research and development expenses of $1,674 and $- for the three months ended June 30, 2018 and 2017, respectively. The Company incurred research and development expenses of $1,788 and $- for the six months ended June 30, 2018 and 2017, respectively.

 

Fair value of financial instruments

Fair Value of Financial Instruments

 

Short-term financial instruments, including cash, accounts receivable, accounts payable and other liabilities, consist primarily of instruments with maturities of three months or less when acquired. Management has estimated that the fair values of current assets and current liabilities approximate their reported carrying amounts.

Income Taxes

Income Taxes

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible.

 

The Company is subject to U.S. federal, state, or local income tax examinations by tax authorities for all tax filings since inception.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board (the "FASB") issued ASU 2014-09, Revenue from Contracts with Customers, which requires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In March 2016, the FASB issued ASU 2016-08, Revenue Recognition - Principal versus Agent (reporting revenue gross versus net). Also, in April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers Identifying Performance Obligations and Licensing, and in May 2016 the FASB issued ASU 2016-12, Revenue Recognition – New Scope Improvements and Practical Expedients. These standards are effective for interim and annual periods beginning after December 15, 2017, and may be adopted earlier. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. The Company has adopted the new standard as of January 1, 2018.

 

In February 2016, the FASB issued ASU No. 2016-02, Leases ("ASU 2016-02"), which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 will be effective for interim and annual periods beginning after December 15, 2018. Early adoption of ASU 2016-02 is permitted. The new standard requires a modified retrospective transition approach for all leases existing at, or entered into after, the date of initial application, with an option to use certain transition relief. The Company is currently evaluating the impact of adopting ASU 2016-02 on the condensed consolidated financial statements.

XML 27 R17.htm IDEA: XBRL DOCUMENT v3.10.0.1
Nature of Organization and Summary of Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of estimated useful lives of property and equipment

 

Asset Category No. of Years
   
Office furniture and equipment 3
Laboratory equipment 3-5
Computers and software 3
Leasehold improvements Shorter of the estimated useful life of the asset or lease term
XML 28 R18.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property and Equipment (Tables)
6 Months Ended
Jun. 30, 2018
Property, Plant and Equipment [Abstract]  
Components of property and equipment
    March 31,     December 31,  
    2018     2017  
             
Lab equipment   $ 551     $ -  
Office and computer equipment     36       -  
Leasehold improvements     22       -  
      609       -  
Less: accumulated depreciation and amortization     (16 )     -  
                 
Total property and equipment, net   $ 593     $ -  
XML 29 R19.htm IDEA: XBRL DOCUMENT v3.10.0.1
Goodwill and Intangible Assets (Tables)
6 Months Ended
Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill roll forward

 

      Adjustments to Goodwill      
  December 31, 2017   Acquisitions   March 31, 2018  
             
Medical research instrumentation and CRO   $ -     $ 6,490     $ 6,490  
Gross carrying amount     -       6,490       6,490  
Accumulated Impairment Loss     -       -       -  
Goodwill   $ -     $ 6,490     $ 6,490  

 

Summary of intangible assets
  March 31, 2018   December 31, 2017  
  Gross   Accumulated Amortization   Net   Gross   Accumulated Amortization   Net  
                         
Patents   $ 26,194     $ (129 )   $ 26,065     $ -     $ -     $ -  
XML 30 R20.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholder's Equity (Tables)
6 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Summary of warrant activity
    Number of Shares     Weighted-average exercise price     Weighted-average remaining contractual term (in years)     Aggregate intrinsic value (in thousands)  
                         
Outstanding at December 31, 2017     502,113     $ 0.69       5     $ -  
Exercisable at December 31, 2017     502,113     $ 0.69       5     $ -  
                                 
Granted     2,042,382       0.95       5     $ -  
Canceled     502,113       0.69       5     $ -  
                                 
Outstanding at March 31, 2018     2,042,382     $ 0.95       5     $ -  
Exercisable at March 31, 2018     2,042,382     $ 0.95       5     $ -  
Schedule of Valuation Assumptions
Expected life (in years)     5.00  
Expected volatility     67.64%  
Risk free interest rate     2.65%  
Expected dividend yield     -%  
XML 31 R21.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Tables)
6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]  
Schedule of Income Tax Provision

The following table provides the components of income (loss) from continuing operations before provision for taxes on income:

 

Three Months Ended March 31,   2018     2017  
             
Income (loss) from operations before income taxes:        
U.S.   $ (323 )   $ (53 )
Non-U.S.     2       -  
                 
      (321 )     (53 )
                 
Income Tax Provision:                
Current:                
Federal     -       -  
Foreign     -       -  
State     -       -  
                 
Total Current     -       -  
                 
Deferred:                
Federal     105       10  
Foreign     -       -  
State     5       -  
                 
Income Tax Benefit   $ 110     $ 10  
Schedule of Deferred Tax Assets and Liabilities
   

March 31,

2018

   

December 31,

2017

 
             
Deferred tax assets:            
Net operating loss carryforward   $ 3,307     $ -  
Allowance for doubtful accounts     24       -  
Deferred revenue     6          
Other     3       -  
                 
Total deferred tax assets     3,340       -  
Less: valuation allowance     (3,307 )     -  
                 
Total deferred tax assets   $ 33     $ -  

 

Deferred tax liabilities:            
Intangible assets   $ 1,263     $ -  
Equipment     84       -  
                 
Total deferred tax liabilities     1,347       -  
                 
Net deferred tax liabilities   $ 1,314     $ -  
XML 32 R22.htm IDEA: XBRL DOCUMENT v3.10.0.1
Nature of Organization and Summary of Significant Accounting Policies (Details)
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2018
Computers and software [Member]    
Property, Plant and Equipment, Useful Life   3 years
Leasehold improvements [Member]    
Property, Plant and Equipment, Estimated Useful Lives Shorter of the estimated useful life of the asset or lease term  
Office furniture and equipment [Member]    
Property, Plant and Equipment, Useful Life 3 years  
Minimum [Member] | Laboratory equipment [Member]    
Property, Plant and Equipment, Useful Life   3 years
Maximum [Member] | Laboratory equipment [Member]    
Property, Plant and Equipment, Useful Life   5 years
XML 33 R23.htm IDEA: XBRL DOCUMENT v3.10.0.1
Nature of Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Mar. 19, 2018
Dec. 31, 2017
Dec. 31, 2016
Common stock issued 54,382,961   54,382,961     9,508,539  
Cash and cash equivalents $ 68 $ 577 $ 68 $ 577   $ 235 $ 685
Concentrations of Credit Risk     100.00%        
Foreign currency translation income (loss) 52 $ 56      
Allowance 109   $ 109     0  
Goodwill amortization period     10 years        
Impairment charges     $ 0 0      
Revenue from contract research 7 7      
Product warranty reserve 0   0     $ 0  
Research and development expenses $ 182 $ 41 $ 223 $ 81      
Sales Revenue, Net [Member] | Four Customer [Member]              
Concentrations of Credit Risk     84.00%        
Sales Revenue, Net [Member] | TwoCustomers [Member]              
Concentrations of Credit Risk       93.00%      
WestMountain [Member]              
Common stock issued         42,522,598    
XML 34 R24.htm IDEA: XBRL DOCUMENT v3.10.0.1
Acquisitions (Details Narrative)
$ in Thousands
Mar. 19, 2018
USD ($)
CytoBioscience [Member]  
Purchase price $ 30,362
XML 35 R25.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property and Equipment (Details) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Property and equipment, Gross $ 608 $ 0
Less: accumulated depreciation and amortization (106) 0
Total property and equipment, net 502
Leasehold improvements [Member]    
Property and equipment, Gross 22 0
Lab Equipment [Member]    
Property and equipment, Gross 550 0
Office furniture and equipment [Member]    
Property and equipment, Gross $ 36 $ 0
XML 36 R26.htm IDEA: XBRL DOCUMENT v3.10.0.1
Property and Equipment (Details Narrative) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 35 $ 1
XML 37 R27.htm IDEA: XBRL DOCUMENT v3.10.0.1
Goodwill and Intangible Assets (Details) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]    
Medical research instrumentation and CRO $ 6,490 $ 0
Gross carrying amount 6,490 0
Accumulated Impairment Loss 0 0
Goodwill 25,139
Adjustments to Goodwill Acquisitions    
Medical research instrumentation and CRO 6,490  
Gross carrying amount 6,490  
Accumulated Impairment Loss 0  
Goodwill $ 6,490  
XML 38 R28.htm IDEA: XBRL DOCUMENT v3.10.0.1
Goodwill and Intangible Assets (Details 1) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]    
Patents gross $ 26,194 $ 0
Accumulated Amortization (129) 0
Patents Net $ 26,065 $ 0
XML 39 R29.htm IDEA: XBRL DOCUMENT v3.10.0.1
Notes Payable (Details Narrative)
$ in Thousands
6 Months Ended
Jun. 30, 2018
USD ($)
Related Party 1 [Member]  
Principal balance $ 787
Interest rate 5.00%
Due date Feb. 26, 2021
Accrued interest $ 3
Related Party 2 [Member]  
Principal balance $ 336
Interest rate 5.00%
Due date May 01, 2019
Accrued interest $ 1
Skyline [Member]  
Principal balance $ 1,113
Interest rate 8.00%
Due date Feb. 28, 2020
XML 40 R30.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholder's Equity (Details) - USD ($)
$ / shares in Units, $ in Thousands
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Balance Outstanding, Ending 2,042,382  
Exercisable 2,042,382  
Weighted Average Exercise Price    
Balance Outstanding, Ending $ 0.95  
Exercisable $ 0.95  
Aggregate Intrinsic Value    
Balance Outstanding, Ending $ 0  
Exercisable, Ending $ 0  
Warrant [Member]    
Balance Outstanding, Beginning 502,113  
Granted 2,042,382  
Canceled 502,113  
Balance Outstanding, Ending   502,113
Exercisable   502,113
Weighted Average Exercise Price    
Balance Outstanding, Beginning $ 0.69  
Granted 0.95  
Canceled $ 0.69  
Balance Outstanding, Ending   $ 0.69
Exercisable   $ 0.69
Weighted Average Remaining Contractual Term (Years)    
Balance Outstanding, Beginning 5 years  
Granted 5 years  
Canceled 5 years  
Balance Outstanding, Ending 5 years 5 years
Exercisable, Ending 5 years 5 years
Aggregate Intrinsic Value    
Balance Outstanding, Beginning $ 0  
Granted 0  
Canceled $ 0  
Balance Outstanding, Ending   $ 0
Exercisable, Ending   $ 0
XML 41 R31.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders Equity (Details 1)
6 Months Ended
Jun. 30, 2018
Stockholders' Equity Note [Abstract]  
Expected life (in years) 5 years
Expected volatility 67.64%
Risk free interest rate 2.65%
Expected dividend yield 0.00%
XML 42 R32.htm IDEA: XBRL DOCUMENT v3.10.0.1
Stockholders Equity (Details Narrative) - USD ($)
$ / shares in Units, $ in Thousands
6 Months Ended
Mar. 19, 2018
Jun. 30, 2018
Dec. 31, 2017
Common stock, shares authorized   100,000,000 100,000,000
Common stock, par value per share   $ 0.001 $ 0.001
Common stock warrants exercised, Shares   415,800  
Common stock warrants exercised, Value   $ 468  
Common stock issued   415,800  
Investors and placement agents [Member]      
Warrants issued 2,042,382    
Exercise price $ 0.95    
XML 43 R33.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Details) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Income (loss) from operations before income taxes:        
U.S. $ (2,370) $ (38) $ (2,693) $ (91)
Non-U.S. (124) (122)
Income (loss) from operations before income taxes (2,494) (38) (2,815) (91)
Current:        
Federal
Foreign
State
Total current
Deferred:        
Federal 180 12 285 23
Foreign
State 4 9
Income Tax Benefit $ 184 $ 12 $ 294 $ 23
XML 44 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Details 1) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Deferred tax assets:    
Net operating loss carryforwards $ 3,597
Allowance for doubtful accounts 24
Deferred revenue 6  
Other 3
Total deferred tax assets 3,630
Less: valuation allowance (3,597)
Total deferred tax assets 33
Deferred tax liabilities:    
Intangible assets 1,094
Equipment 69
Total deferred tax liabilities 1,163
Net deferred tax liabilities $ 1,130
XML 45 R35.htm IDEA: XBRL DOCUMENT v3.10.0.1
Income Taxes (Details Narrative) - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Net operating loss carryforwards $ 15,125 $ 0
Income tax receivable $ 31 $ 31
Maximum [Member]    
Operating Loss Carryforwards, Expiration Date Dec. 31, 2038  
Minimum [Member]    
Operating Loss Carryforwards, Expiration Date Dec. 31, 2035  
XML 46 R36.htm IDEA: XBRL DOCUMENT v3.10.0.1
Related Parties (Details Narrative) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Related Party Transactions [Abstract]        
Consulting fees from related parties $ 0 $ 40 $ 19 $ 79
XML 47 R37.htm IDEA: XBRL DOCUMENT v3.10.0.1
Commitments and Contingencies (Details Narrative) - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]        
Operating leases $ 22 $ 40 $ 22 $ 0
Rent expense $ 65 $ 0 $ 73 $ 0
XML 48 R38.htm IDEA: XBRL DOCUMENT v3.10.0.1
Subsequent Event (Details Narrative) - USD ($)
$ in Thousands
6 Months Ended
Jun. 11, 2018
May 01, 2018
Apr. 08, 2018
Jun. 30, 2018
Common stock warrants exercised, Shares       415,800
Common stock warrants exercised, Value       $ 468
Common stock issued       415,800
Subsequent Event [Member] | Economic development agreement [Member]        
Settlement Description On June 11, 2015, the Company entered an economic development agreement with the City of San Antonio ("City") for $1,000 subject to the Company's commitment to invest significantly in San Antonio with respect to facilities and employment. Accordingly, the City made the first installment of $500 on August 13, 2015. On March 29, 2016, the Company returned $100 of the $500 leaving a remaining balance of $400.  

On April 9, 2018, the Company and the City terminated by mutual consent, the economic development agreement. The Company, as part of the termination, agreed to return the $400 over a twenty-four month period with first payment due within 60 days or June 8, 2018. The amount has been accrued and is a component of accounts payable (short-term portion) and other long-term liability (long-term portion) as of June 30, 2018. The Company is currently in default with this agreement, and accordingly, is in negotiation with the City to extend the first repayment installment.

 
Subsequent Event [Member] | Chief Research Officer [Member]        
Formal settlement description   Effective May 1, 2018, a formal settlement was reached and executed, whereby Dr. Crumb agreed to compensate the Company in the amount of $468 as follows: " $300 - to be paid over time from Dr. Crumb's on-going, but new CRO work " $168 - paid from current CRO studies contracted for which one hundred percent (100%) is payable to the Company. This research is expected to be completed by the end of 2018.    
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