Colorado
|
26-1315305
|
|||
(State or other Jurisdiction of Incorporation)
|
(IRS Employer Identification Number)
|
3463 Magic Drive, Suite 120
|
||||
San Antonio, TX 78229
|
Large accelerated filer [ ]
|
|
Accelerated filer [ ]
|
Non-accelerated filer [ ]
|
|
Smaller reporting company [X]
|
(Do not check if smaller reporting company)
|
Emerging growth company [ ]
|
|
|
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
|
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
|
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
|
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
|
$
|
-
|
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
|
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
|
$
|
-
|
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
|
June 30, 2018
|
December 31, 2017
|
|||||||||||||||||||||||
Gross
|
Accumulated Amortization
|
Net
|
Gross
|
Accumulated Amortization
|
Net
|
|||||||||||||||||||
Patents
|
$
|
26,194
|
$
|
(1,055
|
)
|
$
|
25,139
|
$
|
-
|
$
|
-
|
$
|
-
|
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
|
$
|
-
|
Expected life (in years)
|
5.00
|
|||
Expected volatility
|
67.64%
|
|
||
Risk free interest rate
|
2.65%
|
|
||
Expected dividend yield
|
-%
|
|
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
|
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
|
$
|
-
|
·
|
$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.
|
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
|
Exhibit
|
|
Filed or
Furnished
|
|||
Number
|
|
Exhibit Description
|
|
|
Herewith
|
|
X
|
||||
31.2 | X | ||||
|
X
|
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)
|
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
|
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
|
|
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
|
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
|
|
|
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
|
|
Document and Entity Information - shares |
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 |
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 |
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 |
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:
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. |
Acquisitions |
6 Months Ended |
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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. |
Property and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | 3. Property and Equipment
The following table provides the components of property and equipment:
Depreciation expense was approximately $35 and $1 for the three months ended, March 31, 2018 and 2017, respectively. |
Goodwill and Intangible Assets |
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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:
The following table displays intangible assets:
Amortization expense related to intangible assets was $129 and $- for the for the three months ended, March 31, 2018 and 2017, respectively. |
Notes Payable |
6 Months Ended |
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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. |
Stockholders Equity |
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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:
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.
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. |
Income Taxes |
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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:
Significant components of deferred tax assets and liabilities are as follows:
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 |
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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. |
Commitments and Contingencies |
6 Months Ended |
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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. |
Subsequent Event |
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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:
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Nature of Organization and Summary of Significant Accounting Policies (Policy) |
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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. |
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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. |
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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. |
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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. |
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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. |
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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. |
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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. |
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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:
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.
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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. |
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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. |
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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. |
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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. |
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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. |
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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.
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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. |
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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. |
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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. |
Nature of Organization and Summary of Significant Accounting Policies (Tables) |
6 Months Ended | ||||||||||||
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Jun. 30, 2018 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Schedule of estimated useful lives of property and equipment |
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of property and equipment |
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill roll forward |
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Summary of intangible assets |
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Stockholder's Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of warrant activity |
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Schedule of Valuation Assumptions |
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Income Taxes (Tables) |
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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:
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Schedule of Deferred Tax Assets and Liabilities |
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Nature of Organization and Summary of Significant Accounting Policies (Details) |
3 Months Ended | 6 Months Ended |
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Jun. 30, 2018 |
Jun. 30, 2018 |
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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 |
Nature of Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Mar. 19, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
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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 |
Acquisitions (Details Narrative) $ in Thousands |
Mar. 19, 2018
USD ($)
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CytoBioscience [Member] | |
Purchase price | $ 30,362 |
Property and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
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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 |
Property and Equipment (Details Narrative) - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2018 |
Jun. 30, 2017 |
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Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 35 | $ 1 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2018 |
Dec. 31, 2017 |
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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 |
Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||
Patents gross | $ 26,194 | $ 0 |
Accumulated Amortization | (129) | 0 |
Patents Net | $ 26,065 | $ 0 |
Notes Payable (Details Narrative) $ in Thousands |
6 Months Ended |
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Jun. 30, 2018
USD ($)
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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 |
Stockholders Equity (Details 1) |
6 Months Ended |
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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% |
Stockholders Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
6 Months Ended | ||
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Mar. 19, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
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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 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
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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 |
Income Taxes (Details 1) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
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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 |
Income Taxes (Details Narrative) - USD ($) $ in Thousands |
6 Months Ended | |
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Jun. 30, 2018 |
Dec. 31, 2017 |
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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 |
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 |
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 |
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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