XBRL Rendering Preview
v3.20.2
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2020
Nov. 16, 2020
Document and Entity Information:    
Entity Registrant Name Clinigence Holdings, Inc.  
Document Type 10-Q  
Document Period End Date Sep. 30, 2020  
Amendment Flag false  
Entity Central Index Key 0001479681  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   5,262,910
Entity Filer Category Non-accelerated Filer  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Shell Company false  
Entity Current Reporting Status Yes  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Entity Interactive Data Current Yes  
Entity Incorporation, State Country Code DE  
File Number 000-53862  
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Current assets    
Cash $ 27,742 $ 1,065,434
Accounts receivable 72,332 100,183
Inventory 0 26,988
Prepaid expenses and other current assets 133,025 50,747
Total current assets 233,099 1,243,352
Long-term assets    
Property and equipment, net 66,727 83,353
Right of use asset, net 211,448 247,196
Investment in AHA 6,402,278 0
Intangilbe assets, net 0 1,535,974
Goodwill 0 3,471,508
Deposits and other assets 9,581 11,121
Restricted cash 50,307 100,000
Total assets 6,973,440 6,692,504
Current liabilities    
Accounts payable and accrued expenses 682,520 1,752,659
Accrued interest on notes payable 0 34,358
Due to related parties 0 128,477
Lease liability - current 54,564 50,406
Deferred revenue 17,062 165,560
Current portion of convertible notes payable 0 2,112,060
Current portion of notes payable 510,133 366,933
Total current liabilities 1,264,279 4,610,453
Long-term liabilities    
Notes payable 150,000 0
Lease liability - long term 182,059 223,618
Total liabilities 1,596,338 4,834,071
Stockholders' equity    
Preferred stock, $.001 par value; authorized - 100,000,000 shares; issued and outstanding - 0 shares in 2020 and 2019, respectively 0 0
Common stock, $.001 par value; authorized - 800,000,000 shares; 5,282,545 and 4,649,179 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively 5,282 4,649
Additional paid-in capital 17,079,885 14,422,579
Accumulated deficit (11,708,065) (12,568,795)
Total stockholders' equity 5,377,102 1,858,433
Total liabilities and stockholders' equity $ 6,973,440 $ 6,692,504
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares
Sep. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Preferred stock, par value $ .001 $ .001
Preferred stock, shares authorized 100,000,000 100,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.001 $ 0.001
Common stock, shares authorized 800,000,000 800,000,000
Common stock, shares issued 5,282,545 4,649,179
Common stock, shares outstanding 5,282,545 4,649,179
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Income Statement [Abstract]        
Sales $ 350,032 $ 194,608 $ 1,194,250 $ 852,022
Cost of Sales 210,894 83,348 674,881 578,857
Gross profit 139,138 111,260 519,369 273,165
Operating Expenses        
Research and development 73,827 107,761 502,961 571,471
Sales and marketing (5,248) 202,966 168,601 364,518
General and Administrative Expense 698,598 706,659 2,876,351 2,607,644
Amortization 0 0 222,032 47,211
Total operating expenses 767,177 1,017,386 3,769,945 3,590,844
Loss from operations (628,039) (906,126) (3,250,576) (3,317,679)
Other income (expenses)        
Loss on sale of subsidiary 0 0 (158,744) 0
Gain on sale of assets 2,404,066   4,732,244 0
Loss on extinguishment of debt 0 0 (167,797) (130,140)
Loss on sale of assets (1,621) 0 (1,621) 0
Interest Expense (18,252) 48,496 (332,528) (8,528)
Total other income (expenses) 2,384,193 48,496 4,071,554 (138,668)
Income (loss) from continuing operations 1,756,154 (857,630) 820,978 (3,456,347)
Income from discontinued operations (including gain on disposalof $142,027 for the nine months ended September 30, 2020) 0 0 39,752 0
Net income (loss) $ 1,756,154 $ (857,630) $ 860,730 $ (3,456,347)
Basic and fully diluted income (loss) per common share:        
Continuing operations $ 0.34 $ (.22) $ 0.17 $ (1.03)
Discontinued operations 0 0 0.01 0
Net income (loss) per common share $ 0.34 $ (.22) $ 0.18 $ (1.03)
Weighted average common shares outstanding - basic and fully diluted 5,179,342 3,825,535 4,828,014 3,366,339
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical)
9 Months Ended
Sep. 30, 2020
USD ($)
Discontinued Operations [Member]  
Gain on disposal of HealthDatix $ 142,027
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($)
Common Stock
Paid-In Capital
Accumulated Deficit
Treasury Stock
Total
Stockholders' Equity, beginning of period, Value at Dec. 31, 2018 $ 1,775 $ 3,953,147 $ (5,452,275) $ (1,497,353)
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2018 1,775,064        
Common stock issued for cash, Value $ 479 2,664,521 2,665,000
Common stock issued for cash, Shares 479,468        
Common stock issued for services, Value $ 212 449,842 450,054
Common stock issued for services, Shares 212,522        
Common stock issued in connection with separation agreement, Value $ 1,125 4,167,094 4,168,219
Common stock issued in connection with separation agreement, Shares 1,124,594        
Net Income (loss) (968,161) (968,161)
Stockholders' Equity, end of period, Value at Mar. 31, 2019 $ 3,591 11,234,604 (6,420,436) 4,817,759
Stockholders' Equity, end of period, Shares at Mar. 31, 2019 3,591,648        
Common stock issued for cash, Value $ 234 1,299,766 1,300,000
Common stock issued for cash, Shares 233,886        
Common shares cancelled, Value $ (144) 144
Common shares cancelled, Shares 143,642        
Notes payable converted to common stock, Value $ 144 530,248 530,392
Notes payable converted to common stock, Shares 143,642        
Net Income (loss) (1,630,556) (1,630,556)
Stockholders' Equity, end of period, Value at Jun. 30, 2019 $ 3,825 13,064,762 (8,050,992) 5,017,595
Stockholders' Equity, end of period, Shares at Jun. 30, 2019 3,825,534        
Net Income (loss) (857,630) (857,630)
Stockholders' Equity, end of period, Value at Sep. 30, 2019 $ 3,825 13,595,154 (8,908,622) 4,159,965
Stockholders' Equity, end of period, Shares at Sep. 30, 2019 3,825,534        
Stockholders' Equity, beginning of period, Value at Dec. 31, 2019 $ 4,649 14,422,579 (12,568,795) 1,858,433
Stockholders' Equity, beginning of period, Shares at Dec. 31, 2019 4,649,179        
Options issued for services 848,778 848,778
Purchase of treasury stock (1,170) (1,170)
Net Income (loss) (1,122,730) (1,122,730)
Stockholders' Equity, end of period, Value at Mar. 31, 2020 $ 4,649 15,271,357 (13,691,525) (1,170) 1,583,311
Stockholders' Equity, end of period, Shares at Mar. 31, 2020 4,649,179        
Options issued for services 1,056,599 1,056,599
Common stock issued for services, Value $ 226 361,086 361,312
Common stock issued for services, Shares 225,820        
Treasury stock cancelled 1,170 1,170
Net Income (loss) 227,306 227,306
Stockholders' Equity, end of period, Value at Jun. 30, 2020 $ 4,875 16,689,042 (13,464,219) 3,229,698
Stockholders' Equity, end of period, Shares at Jun. 30, 2020 4,874,999        
Common stock issued for cash, Value $ 190 119,810 120,000
Common stock issued for cash, Shares 190,476        
Common shares cancelled, Value $ (23) (33,727) (33,750)
Common shares cancelled, Shares (23,276)        
Common stock issued in connection with separation agreement, Value $ 240 304,760 305,000
Common stock issued in connection with separation agreement, Shares 240,346        
Net Income (loss) 1,756,154 1,756,154
Stockholders' Equity, end of period, Value at Sep. 30, 2020 $ 5,282 $ 17,079,885 $ (11,708,065) $ 5,377,102
Stockholders' Equity, end of period, Shares at Sep. 30, 2020 5,282,545        
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income (loss) $ 860,730 $ (3,456,347)
(Income) loss from discontinued operations (39,752) 0
Net income (loss) from continuing operations 820,978 (3,456,347)
Adjustments to reconcile net income (loss) to net cash used in operating activities    
Depreciation 13,376 6,278
Amortization 94,761 73,768
Non cash interest expense 474,344 0
Gain on sale of assets (4,732,244) 0
Loss on sale of assets 1,621 0
Loss on extinguishment of debt 167,797 130,396
Cancellation of common stock (33,750) 0
Stock-based compensation expense 2,571,689 709,787
Changes in operating assets and liabilities:    
Accounts Receivable 17,851 34,371
Prepaid expenses and other current assets (86,650) (160,049)
Deposits and other assets 1,240 67,601
Accounts payable and accrued expenses (661,379) (136,107)
Accrued interest on notes payable (21,730) 0
Lease liability (37,401) 438
Deferred revenue (148,498) 179,511
Net cash used in continuing operating activities (1,557,995) (2,550,353)
Net cash provided by discontinued operating activities 0 0
NET CASH USED IN OPERATING ACTIVITIES (1,557,995) (2,550,353)
CASH FLOWS FROM INVESTING ACTIVITIES:    
Cash acquired in Qualmetrix, Inc. 0 9,098
Decrease in restricted cash 49,693 0
Sale of property and equipment 500 0
Purchases of property and equipment 0 (95,214)
Net cash provided by (used) in continuing investing activities 50,193 (86,116)
Net cash used in discontinued investing activities (2,656) 0
NET CASH PROVIDED BY (USED) IN INVESTING ACTIVITIES 47,537 (86,116)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from sale of common stock 120,000 3,965,000
Payments on note receivable - related party 0 (443,093)
Proceeds from notes payable 461,125 0
Payments on notes payable (108,359) (677,026)
Payments on convertible notes payable 0 (200,000)
Net cash provided by continuing financing activities 472,766 2,644,881
Net cash provided by discontinued financing activities 0 0
NET CASH PROVIDED BY FINANCING ACTIVITIES 472,766 2,644,881
NET INCREASE (DECREASE) IN CASH (1,037,692) 8,412
CASH - BEGINNING OF PERIOD 1,065,434 119,267
CASH - END OF PERIOD 27,742 127,679
Cash paid during the period for:    
Interest 16,130 59,177
Non-cash investing and financing activities:    
Investment in AHA in exchange of assets sold and liabilities assumed 6,402,278 0
Common stock issued for acquisition of Qualmetrix, Inc. 0 937,395
Common stock issued for convertible debt $ 0 $ 89,956
v3.20.2
Note 1 - Organization and Basis of Presentation
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 1 - Organization and Basis of Presentation

Note 1 - Organization and Basis of Presentation

 

The consolidated financial statements presented are those of Clinigence Holdings, Inc., formerly known as iGambit Inc., (the “Company”) and its wholly-owned subsidiaries, Clinigence Health, Inc. (“Clinigence”) and HealthDatix, Inc. (“HealthDatix”). The Company’s name was changed to Clinigence Holdings, Inc. on October 29, 2019 in connection with a reverse merger. In October 2018, Clinigence was incorporated as a wholly-owned subsidiary of Clinigence LLC. The Company is a population health analytics company that provides turnkey SaaS solutions that enable connected intelligence across the care continuum by transforming massive amounts of data into actionable insights. The Company’s solutions help healthcare organizations throughout the United States improve the quality and cost-effectiveness of care, enhance population health management and optimize provider networks. The Company enables risk-bearing healthcare organizations achieve their objectives on the path to value-based care. The Company’s platform automatically extracts and delivers targeted data insights from its cloud-based analytics engine directly to the workflows and technologies of its customers. This enhances end-user workflows with actionable analytics, seamlessly delivers data from disparate sources to the point of engagement, automates the delivery of data to ensure on-time access, and reduces dependency on non-essential applications from the end-user’s workflow. All of this allows the healthcare organization to enable population health management, manage cost and utilization, improve quality, identify gaps in care, risk stratify and target patients, increase collaboration among providers and to optimize network provider performance.

 

Interim Financial Statements

 

The following (a) condensed consolidated balance sheet as of December 31, 2019, which has been derived from audited financial statements, and (b) the unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2020 are not necessarily indicative of results that may be expected for the year ending December 31, 2020. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on May 14, 2020.

  

Sale of Intellectual Property

 

On May 27, 2020, Clinigence Holdings Inc. entered into an Intellectual Property Asset Purchase Agreement (the “IP APA Agreement”) by and among Clinigence Health, Inc., a Delaware corporation (“Clinigence Health” or “Seller”), Clinigence Holdings, Inc., a Delaware corporation (“CLNH” or “Shareholder”), AHA Analytics, Inc., a Delaware corporation (“Purchaser”) and Accountable Healthcare America Inc., a Delaware corporation (“AHA”). The transactions contemplated by the IP APA Agreement were consummated on May 29, 2020 (the “Closing”).

 

The IP APA Agreement provided for the sale of certain intellectual property and rights, including but not limited to copyrights, patents, pending patents, and continuation in part, (the “Transferred Assets”) to Purchaser from the Seller, hereafter referred to as the “Asset Sale.”

 

Subject to the provisions of the IP APA Agreement, the Asset Sale provided for an aggregate purchase price (“Purchase Price”) to Seller and Shareholder equal to the sum of the Series E Preferred Stock, (the Preferred Stock”), the Assumed Liabilities, and an adjustment to the Stated Value.

 

The Preferred Stock shall have an initial stated value of $15,000,000 in the aggregate, unless there is an adjustment to the Stated Value, as mentioned below. The Stated Value, however, shall be reduced by the Assumed Liabilities as set forth herein which includes the Hold Back amount as set forth in Article 9 of the IP APA Agreement, and shall automatically convert upon either of the following events:

 

(1)   Immediately before (A) the Purchaser’s consummation of a merger with or an acquisition by a Publicly Traded Company listed on NASDAQ all of the Preferred Shares shall be automatically converted into shares of Common Stock of Purchaser or (B) upon Purchaser’s consummation of the Merger into Common Shares of the Publicly Traded Company (“Pubco Shares”) equal to the Stated Value (as may be adjusted in accordance with the terms of the Certificate of Designation), which Pubco Shares shall be valued at the Fair Market Value of those shares;

 

(2)   After two hundred and forty (240) days from the date of Closing, if the merger with or an acquisition by a Publicly Traded Company has not occurred, the Preferred Stock shall automatically convert into 3,750,000 of Common Shares of Stock of the Purchaser, based upon a $4 per share valuation on the date of Conversion.

 

The investment in AHA was recorded at $6,402,278 based on 1,252,892 shares outstanding at a fair value of $5.11 per share from a fair market value opinion on the Preferred Stock outstanding on the Closing date.

 

The Assumed Liabilities consist of the following:

 

Convertible notes payable   $ 2,442,875  
Related party loan payable     128,477  
Note payable - Jerrold Young     15,000  
Note payable - Lighter Capital     295,629  
Accounts payable     323,563  
Accrued interest on notes payable     72,891  
    $ 3,278,435  

 

The initial Stated Value of $15,000,000 (less the Assumed Liabilities) in the aggregate upon the Purchaser’s consummation of a merger with or an acquisition by a Publicly Traded Company listed on NASDAQ (the “Merger”) shall be based upon a minimum valuation of Purchaser equal to twelve (12) times the Audited EBITDA of Purchaser upon the closing of the Merger (the “Valuation”). Should the Purchaser’s Valuation in a Merger be adjusted downward due to market conditions, as reflected in and governed by the terms of, the definitive agreements relating to such Merger between Purchaser and the Publicly Traded Company, the Stated Value shall be adjusted downward proportionally.

 

Gain on sale of assets reported in the statements of operations consists of the following:

 

Fair value of AHA Series E Preferred Stock received   $ 6,402,278  
Assumed liabilities     3,278,435  
Less assets sold:        
Intangible assets     (1,476,961 )
Goodwill     (3,471,508 )
Gain on sale of assets   $ 4,732,244  

 

During the three months ending September 30, 2020, the Company recorded an additional gain on the sale of intellectual property as a result of obtaining a legal discharge of its obligations from the lenders and noteholders and payment made by AHA in regards to the debt.

 

Business Acquisitions

 

A) Reverse Merger

 

On August 8, 2019, iGambit, Inc. entered into an Agreement and Plan of Merger (the “Reverse Merger Agreement”) by and among Clinigence Health, Inc., a Delaware corporation (“Clinigence”), iGambit, Inc., a Delaware corporation (“iGambit” or the “Company”), HealthDatix, Inc., a Delaware corporation and wholly owned subsidiary of iGambit (“Merger Sub”), and John Salerno, an individual and holder of shares of iGambit capital stock constituting a majority of the votes eligible to be cast by all of the stockholders of iGambit (the “Signing Stockholder”). The transactions contemplated by the Reverse Merger Agreement were consummated on October 29, 2019 (the “Closing”).

 

The Reverse Merger Agreement provided for the merger of Merger Sub with and into Clinigence, hereafter referred to as the “Acquisition.” As a result of the Acquisition, Merger Sub ceased to exist, and Clinigence became the surviving corporation and a direct wholly owned subsidiary of iGambit, and the former stockholders of Clinigence (the “Clinigence Stockholders”) have a direct equity ownership and controlling interest in iGambit. Merger Sub was renamed Clinigence Health Inc. iGambit was renamed Clinigence Holdings, Inc. Merger Sub was originally incorporated in Delaware on October 17, 2013 and had no operating activity prior to the reported transaction.

 

At the Closing, all of the outstanding shares of Clinigence common stock (the “Clinigence Shares”) were converted solely into the right to receive a number of shares of iGambit common stock (the “Company Shares”) such that the holders of outstanding equity of Clinigence immediately prior to the Closing own 85%, on a fully-diluted basis, of the outstanding equity of iGambit immediately following the Closing, and holders of outstanding equity of iGambit immediately prior to the Closing own 15%, on a fully-diluted basis, of the outstanding equity of iGambit. For each share of Clinigence Shares, each former Clinigence Stockholder received 0.22489093 shares of Company Shares after giving effect to the reverse stock split.

 

The Business Combination was treated as a “reverse acquisition” for accounting purposes, whereby Clinigence is considered the acquirer for accounting purposes, and the historical financial statements before the Business Combination have been replaced with the historical financial statements of Clinigence and its subsidiaries before the Business Combination. In connection with the Acquisition, the Company amended its certificate of incorporation to (i) effect a reverse stock split of the Company Shares at a ratio of 1 for 500 (the “Reverse Split Certificate of Amendment”), and (ii) change its name to Clinigence Holdings, Inc. (the “Name Change Certificate of Amendment”).

 

The following table represents the fair value of the consideration paid allocated to the assets and liabilities acquired in applying the acquisition method for the completion of the reverse merger:

 

Consideration:    
Issuance of 797,108 shares of common stock   $ 836,963  
Net liabilities assumed     1,467,897  
Total consideration   $ 2,304,860  
         
Assets Acquired:        
Current assets   $ 46,209  
Property, equipment, and other non-current assets     1,593  
Goodwill     2,257,058  
Total assets acquired   $ 2,304,860  

 

B) QualMetrix Acquisition

 

On March 1, 2019, prior to the reverse merger referred to above, the Company entered into a Contribution Agreement by and among Clinigence Holdings, Inc. (“Holdings”), Qualmetrix, Inc. (“QMX”), and the Members of Clinigence, LLC (“Agreement”) whereby Clinigence Holdings, Inc. acquired all of the assets and operations and assumed all of the liabilities of Qualmetrix, Inc. The Company acquired QMX to further its SAAS-based offerings to its customers and expand into new markets. The goodwill is derived largely from the expected growth of the Company, as well as synergies and economies of scale expected from combining the operations of QMX with the Company. Pursuant to the Agreement, all of the outstanding Series A and Series B Preferred Stock and Common Stock of Qualmetrix, Inc. totaling 34,726,659 shares were exchanged for 5,021,950 common shares of Clinigence Holdings, Inc. All outstanding shares of Qualmetrix, Inc. immediately preceding the exchange were treated as one class. On the date of the transaction, the shares of common stock issued to Qualmetrix, Inc. had an estimated fair value of $0.83 per share based on an independent valuation.

 

The following table represents the fair value of the consideration paid allocated to the assets and liabilities acquired in applying the acquisition method for the completion of the Qualmetrix, Inc. business combination:

 

Consideration:    
Issuance of 5,021,950 shares of common stock   $ 4,168,219  
Net liabilities assumed     989,805  
Total consideration   $ 5,158,024  
         
Assets Acquired:        
Current assets   $ 24,698  
Property, equipment, and other non-current assets     7,818  
Identifiable intangible assets     1,654,000  
Goodwill     3,471,508  
Total assets acquired   $ 5,158,024  
v3.20.2
Note 2 - Discontinued Operations
9 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Note 2 - Discontinued Operations

Note 2 – Discontinued Operations

 

Sale of Business

 

On April 21, 2020 (effective March 1, 2020) the Company completed the sale of HealthDatix, Inc., a Florida corporation (“HDX FL”) to Jerry Robinson, Mary-Jo Robinson and Kathleen Shepherd  (“HDX Management”) in accordance with a Stock Purchase Agreement (the “Purchase Agreement”) by and between the Company and HDX Management.  Pursuant to the Purchase Agreement, the total consideration paid for the outstanding capital stock of HDX FL was the execution of Settlement and Release Agreements by HDX Management, releasing the Company from all obligations pursuant to certain HDX Management Employment Agreements dated April 1, 2017, and remittance of 1,000 shares of HDX common stock previously issued to HDX Management. As per the Purchase Agreement, the Company’s operations of HDX FL ended February 29, 2020 and HDX Management’s operation of the business is effective as of March 1, 2020.

 

The components of income from discontinued operations presented in the consolidated statements of operations for the nine months ended September 30, 2020 are presented as follows:

 

Sales   $ 5,958  
Cost of sales     (6,795 )
General and administrative expenses     (101,100 )
Depreciation and amortization     (75 )
Interest expense     (263 )
Loss from operations     (102,275 )
Gain on disposal of HealthDatix     142,027  
Income from discontinued operations   $ 39,752  
v3.20.2
Note 3 - Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 3 - Summary of Significant Accounting Policies

Note 3 – Summary of Significant Accounting Policies

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Clinigence Health, Inc., HealthDatix Inc.  All intercompany accounts and transactions have been eliminated.

 

Use of Estimates in the Preparation of Financial Statements

 

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

 

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. The Company’s investment in AHA was valued at level 3 input.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Convertible Instruments

 

The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

 

Revenue Recognition

 

Revenue is generated primarily by software licenses, training, and consulting. Software licenses are provided as SaaS-based subscriptions that grants access to proprietary online databases and data management solutions. Training and consulting are project based and billable to customers on a monthly-basis or task-basis.

 

Revenue from training and consulting are generally recognized upon delivery of training or completion of the consulting project. The duration of training and consulting projects are typically a few weeks or months and last no longer than 12 months.

 

SaaS-based subscriptions are generally marketed under multi-year agreements with annual, semi-annual, quarterly, or month-to-month renewals and revenue is recognized ratably over the renewal period with the unearned amounts received recorded as deferred revenue. For multiple-element arrangements accounted for in accordance with specific software accounting guidance, multiple deliverables are segregated into units of accounting which are delivered items that have value to a customer on a standalone basis.

 

On January 1, 2019, the Company adopted the new revenue recognition standard Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”, using the modified retrospective method. The modified retrospective adoption used by the Company did not result in a material cumulative effect adjustment to the opening balance of accumulated deficit. Revenue from substantially all the Company’s contracts with customers continues to be recognized over time as performance obligations are satisfied.

 

The Company provides its customers with software licensing, training, and consulting through SaaS-based subscriptions. This subscription revenue represents revenue earned under contracts in which the Company bills and collects the charges for licensing and related services. The Company determines the measurement of revenue and the timing of revenue recognition utilizing the following core principles:

 

1.   Identifying the contract with a customer;

 

2.   Identifying the performance obligations in the contract;

 

3.   Determining the transaction price;

 

4.   Allocating the transaction price to the performance obligations in the contract; and

 

5.   Recognizing revenue when (or as) the Company satisfies its performance obligations.

 

Revenues from subscriptions are deferred and recorded as deferred revenue when cash payments are received in advance of the satisfaction of the Company’s performance obligations and recognized over the period in which the performance obligations are satisfied. The Company completes its contractual performance obligations through providing its customers access to specified data through subscriptions for a service period, and training on consulting associated with the subscriptions. The Company primarily invoices its customers on a monthly basis and does not provide any refunds, rights of return, or warranties to its customers.

 

Advertising Costs

 

The Company expenses advertising costs as incurred. Advertising costs of $41,418 and $111,720 were charged to operations for the nine months ended September 30, 2020 and 2019, respectively. Advertising costs of $7,627 and $72,801 were charged to operations for the three months ended September 30, 2020 and 2019, respectively.

 

Cash and Cash Equivalents

 

Cash and cash equivalents are comprised of cash and highly liquid investments with original maturities of 90 days or less at the date of purchase. The Company does not have any cash equivalents as of September 30, 2020 and December 31, 2019. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured.

Accounts Receivable

 

The Company analyzes the collectability of accounts receivable from continuing operations each accounting period and adjusts its allowance for doubtful accounts accordingly.  A considerable amount of judgment is required in assessing the realization of accounts receivables, including the creditworthiness of each customer, current and historical collection history and the related aging of past due balances.  The Company evaluates specific accounts when it becomes aware of information indicating that a customer may not be able to meet its financial obligations due to deterioration of its financial condition, lower credit ratings, bankruptcy or other factors affecting the ability to render payment.

 

Inventory

 

Inventory consisting of finished products is stated at the lower of cost or net realizable value. 

Property and equipment and depreciation

 

Property and equipment are stated at cost. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. Depreciation for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over the estimated lives of the respective assets as follows:

 

Office equipment and fixtures     5 - 7 years  
Computer hardware     5 years  
Computer software     3 years  
Development equipment     5 years  

Amortization

Intangible assets are amortized using the straight line method over the estimated lives of the respective assets as follows:

 

Developed technology     13 years  
Customer relationships     10 years  

 

Long-Lived Assets

 

The Company assesses the valuation of components of its property and equipment and other long-lived assets whenever events or circumstances dictate that the carrying value might not be recoverable. The Company bases its evaluation on indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such factors indicate that the carrying amount of an asset or asset group may not be recoverable, the Company determines whether an impairment has occurred by analyzing an estimate of undiscounted future cash flows at the lowest level for which identifiable cash flows exist. If the estimate of undiscounted cash flows during the estimated useful life of the asset is less than the carrying value of the asset, the Company recognizes a loss for the difference between the carrying value of the asset and its estimated fair value, generally measured by the present value of the estimated cash flows.

 

Deferred Revenue

 

Deposits from customers are not recognized as revenues, but as liabilities, until the following conditions are met: revenues are realized when cash or claims to cash (receivable) are received in exchange for goods or services or when assets received in such exchange are readily convertible to cash or claim to cash or when such goods/services are transferred. When such income item is earned, the related revenue item is recognized, and the deferred revenue is reduced. To the extent revenues are generated from the Company’s support and maintenance services, the Company recognizes such revenues when services are completed and billed. The Company has received deposits from its various customers that have been recorded as deferred revenue and presented as current liabilities in the amount of $17,062 and $165,560 as of September 30, 2020 and December 31, 2019, respectively.

 

Stock-Based Compensation

 

The Company accounts for its stock-based awards granted under its employee compensation plan in accordance with ASC Topic No. 718-20, Awards Classified as Equity, which requires the measurement of compensation expense for all share-based compensation granted to employees and non-employee directors at fair value on the date of grant and recognition of compensation expense over the related service period for awards expected to vest.  The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock options and warrants. The Black-Scholes option pricing model requires the input of highly subjective assumptions including the expected stock price volatility of the Company’s common stock, the risk free interest rate at the date of grant, the expected vesting term of the grant, expected dividends, and an assumption related to forfeitures of such grants.  Changes in these subjective input assumptions can materially affect the fair value estimate of the Company’s stock options and warrants.

 

Income Taxes

 

The Company accounts for income taxes using the asset and liability method in accordance with ASC Topic No. 740, Income Taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

 

The Company applies the provisions of ASC Topic No. 740 for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the Company’s financial statements. In accordance with this provision, tax positions must meet a more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position.

 

Recent Accounting Pronouncements

 

We have reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the condensed consolidated financial statements as a result of future adoption.

v3.20.2
Note 4 - Going Concern
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 4 -Going Concern

Note 4 – Going Concern

 

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.  The Company has an accumulated deficit of $11,708,065, and a working capital deficit of $1,031,180 at September 30, 2020. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time.  The Company’s continuation as a going concern is dependent upon its ability to obtain necessary equity financing and ultimately from generating revenues from its newly acquired subsidiary to continue operations.

 

As a result of the spread of the COVID-19 coronavirus, economic uncertainties have arisen which are likely to negatively impact operations. Other financial impact could occur though such potential impact is unknown at this time. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our facilities, customers, management, support staff and professional advisors. These factors, in turn, may not only impact our operations, financial condition and demand for our goods and services but our overall ability to react timely to mitigate the impact of this event. Also, it may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.

 

The Company expects that working capital requirements will continue to be funded through a combination of its existing funds and further issuances of securities. Working capital requirements are expected to increase in line with the growth of the business. Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund operations over the next twelve months. The Company has no lines of credit or other bank financing arrangements. The Company has financed operations to date through the proceeds of a private placement of equity and debt instruments.  In connection with the Company’s business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with a start-up business and (ii) marketing expenses. The Company intends to finance these expenses with further issuances of securities, and debt issuances. Thereafter, the Company expects it will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to current stockholders. Further, such securities might have rights, preferences or privileges senior to common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict business operations.

 

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

v3.20.2
Note 5 - Property and Equipment
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 5 - Property and Equipment

Note 5 – Property and Equipment

 

Property and equipment are carried at cost and consist of the following at September 30, 2020 and December 31, 2019:

 

    2020   2019
Office equipment and fixtures   $ 106,769     $ 109,468  
Computer hardware     41,066       44,866  
Computer software     16,121       16,121  
Less: Accumulated depreciation     97,229       87,102  
    $ 66,727     $ 83,353  

 

Depreciation expense of $13,376 and $6,278 was charged to operations for the nine months ended September 30, 2020 and 2019, respectively.

v3.20.2
Note 6 - Investment in AHA
9 Months Ended
Sep. 30, 2020
Note 6 - Investment In Aha  
Note 6 - Investment in AHA

Note 6 – Investment in AHA

 

The Company recorded its investment in Accountable Healthcare America, Inc. (“AHA”) of $6,402,278, at the fair value received in the sale of intellectual property referred to in Note 1 at May 29, 2020 in exchange for 1,252,892 shares of AHA’s Series E Convertible Preferred Stock in connection with the Asset Purchase Agreement. AHA is authorized to issue up to 50,000,000 shares of preferred stock with a par value of $.001 per share in one or more series. The Series E Preferred Stock is convertible into common stock of AHA immediately before or upon AHA’s merger with or an acquisition by a publicly traded company listed on NASDAQ. The investment in AHA is accounted for using the cost method of accounting.

v3.20.2
Note 7 - Intangible Assets
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 7 - Intangible Assets

Note 7 – Intangible Assets

 

The following tables provide detail associated with the Company’s acquired identifiable intangible assets:

 

    As of December 31, 2019
     

Gross Carrying

Amount

     

Accumulated

Amortization

     

Net Carrying

Amount

     

Weighted

Average

Useful Life

(in years)

 
Amortized intangible assets:                                
Customer relationships   $ 624,000     $ (52,000 )   $ 572,000       10  
Developed technology     1,030,000       (66,026 )     963,974       13  
Total   $ 1,654,000     $ (118,026 )   $ 1,535,974          

 

Aggregate Amortization Expense:    
For the nine months ended September 30, 2020   $ 59,013  

 

In connection with the sale of intellectual property as discussed in Note 1, the Company sold its intangible assets of $1,476,961, net of accumulated amortization of $177,039 to AHA pursuant to the Asset Purchase Agreement on May 29, 2020.

v3.20.2
Note 8 - Operating Lease
9 Months Ended
Sep. 30, 2020
Leases, Operating [Abstract]  
Note 8 - Operating Lease

Note 8 – Operating Lease

 

The Company determines if a contract is, or contains, a lease at contract inception. Operating leases are included in operating lease right-of-use ("ROU") assets, current portion of operating lease liabilities and operating lease liabilities, net of current portion in the Company's consolidated balance sheets. Finance leases are included in property and equipment, current portion of finance lease obligations and finance lease obligations, net of current portion in the Company's unaudited consolidated balance sheets.

 

ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. In addition, ROU assets include initial direct costs incurred by the lessee as well as any lease payments made at or before the commencement date and exclude lease incentives. The Company used the implicit rate in the lease in determining the present value of lease payments. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Leases with a term of one year or less are generally not included in ROU assets and liabilities.

 

Operating lease ROU assets and operating lease liabilities are recorded on the consolidated balance sheet as follows: 

 

    September 30,
    2020
Operating Lease:        
Operating lease right-of-use assets, net   $ 211,448  
Current portion of operating lease liabilities     54,564  
Operating lease liabilities, net of current portion     182,059  

 

As of September 30, 2020, the weighted-average remaining lease term of the operating lease was 4.0 years. The weighted-average discount rate for the operating lease was 6.75%.

 

The following table summarizes maturities of operating lease liabilities based on lease term as of September 30, 2020:

 

2020   $ 16,925  
2021     69,393  
2022     71,474  
2023     73,619  
2024     37,729  
Total lease payments     269,140  
Less: Imputed interest     32,517  
Present value of lease liabilities   $ 236,623  

 

At September 30, 2020, the Company had the following future minimum payments due under the non-cancelable lease:

 

2020   $ 16,925  
2021     69,393  
2022     71,474  
2023     73,619  
2024     37,729  
Total minimum lease payments   $ 269,140  

 

Consolidated rental expense from continuing operations for all operating leases was $82,374 and $103,341 for the nine months ended September 30, 2020 and 2019, respectively. Rental expense from discontinued operations for all operating leases was $2,519 for the nine months ended September 30, 2020.

 

The following table summarizes the cash paid and related right-of-use operating lease recognized for the nine months ended September 30, 2020.

 

    Nine Months Ended
    September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:        
Operating cash flows from operating leases   $ 50,446  
Right-of-use lease assets obtained in the exchange for lease liabilities:        
Operating leases     37,401  
v3.20.2
Note 9 - Earnings (Loss) Per Common Share
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 9 - Earnings (Loss) Per Common Share

Note 9 - Earnings (Loss) Per Common Share

 

The Company calculates net income (loss) per common share in accordance with ASC 260 “Earnings Per Share” (“ASC 260”). Basic and diluted net earnings (loss) per common share was determined by dividing net earnings (loss) applicable to common stockholders by the weighted average number of common shares outstanding during the period. The Company’s potentially dilutive shares, which include outstanding common stock options, common stock warrants, and convertible debt have not been included in the computation of diluted net loss per share for the nine months ended September 30, 2020 and 2019 as the result would be anti-dilutive.

 

    Nine Months Ended
    September 30,
    2020   2019
Stock options     1,174,814       —    
Stock warrants     557,873       529,685  
Total shares excluded from calculation     1,732,687       529,685  
v3.20.2
Note 10 - Stock Based Compensation
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 10 - Stock Based Compensation

Note 10 – Stock Based Compensation

 

Options

 

In 2019, the Company adopted the 2019 Omnibus Equity Incentive Plan (the "2019 Plan").   Awards granted under the 2019 Plan have a ten-year term and may be incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units or performance shares. The awards are granted at an exercise price equal to the fair market value on the date of grant and generally vest over a four year period.

 

Stock option activity during the nine months ended September 30, 2020 and 2019 follows:

 

    Options Outstanding   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (Years)
Options outstanding at December 31, 2018     —       $ —         —    
No option activity     —         —            
Options outstanding at  September 30, 2019     —       $ –—         —    
Options outstanding at December 31, 2019     48,854     $ 5.11       8.05  
Options granted     1,130,734       1.49          
Options expired     (400 )     0.01          
Options cancelled     (4,374 )     5.56          
Options outstanding at  September 30, 2020     1,174,814     $ 1.61       8.36  

Options outstanding at September 30, 2020 consist of:

 

Date Issued   Number Outstanding   Number Exercisable   Exercise Price   Expiration Date
August 5, 2019     40,480       40,480     $ 5.56     August 5, 2029
October 29, 2019     3,600       3,600     $ 0.0725     June 6, 2027
January 27, 2020     307,884       307,884     $ 1.50     January 27, 2030
January 27, 2020     225,000       225,000     $ 1.50     January 27, 2027
February 29, 2020     95,794       95,794     $ 1.25     February 28, 2030
May 11, 2020     380,000       380,000     $ 1.50     May 11, 2027
June 30, 2020     122,056       122,056     $ 1.45     June 30, 2030
Total     1,174,814       1,174,814              

 

Warrants

 

In 2018, the Company issued fully vested warrants to investors as part of a private placement offering. Each unit offered in the private placement consisted of one share of common stock, and a warrant convertible into 0.4 shares of common stock at an exercise of $1.50 per whole share. The warrants are exercisable for a period of five years from the date of issuance. The warrants were cancelled on March 1, 2019 and reissued upon the Qualmetrix acquisition and are each convertible into one share of common stock at an exercise price of $6.67 per share until December 31, 2024.

 

 

In November 2019, the Company issued fully vested warrants to investors as part of private placement subscription agreements pursuant to which the Company issued convertible promissory notes. Each noteholder received warrants to purchase common stock of 50% of the principal at an exercise price of $5.56 per share with an expiration date of October 31, 2025.

 

Warrant activity during the nine months ended September 30, 2020 and 2019 follows:

 

   

Warrants

Outstanding

  Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (Years)
Warrants outstanding at December 31, 2018     138,997     $ 0.81       5.55  
Warrants granted     529,685       6.67          
Warrants cancelled     (138,997 )     0.81          
Warrants outstanding at September 30, 2019     529,685     $ 6.67       5.26  
Warrants outstanding at December 31, 2019     1,065,251     $ 6.04          
Warrants canceled     (507,378 )     —            
Warrants outstanding at September 30, 2020     557,873     $ 6.77       4.04  

 

Warrants outstanding at September 30, 2020 consist of:

 

Date Issued   Number Outstanding   Number Exercisable   Exercise Price   Expiration Date
March 21, 2019     96,433       96,433     $ 6.67     December 31, 2024
April 30, 2019     3,598       3,598     $ 6.67     December 31, 2024
May 13, 2019     14,393       14,393     $ 6.67     December 31, 2024
May 28, 2019     199,703       199,703     $ 6.67     December 31, 2024
June 5, 2019     7,197       7,197     $ 6.67     December 31, 2024
June 25, 2019     208,361       208,361     $ 6.67     December 31, 2024
September 6, 2019     25,188       25,188     $ 6.67     December 31, 2024
October 29, 2019     1,500       1,500     $ 25.00     February 5, 2023
October 29, 2019     1,500       1,500     $ 25.00     April 27, 2023
Total     557,873       557,873              
v3.20.2
Note 11 - Convertible Notes Payable
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 11 - Convertible Notes Payable

Convertible notes payable consisted of the following at September 30, 2020 and December 31, 2019:

 

    2020   2019
Notes payable convertible into Clinigence common shares at $5.56 per share; bearing interest at a rate of 10%; net of debt discount of $0 and $328,652, respectively; maturing in October 2020   $ —       $ 2,016,723  
Notes payable convertible into Clinigence common shares at $1.25 per share; bearing interest at a rate of 10%; net of debt discount of $1,100 and $2,163, respectively; maturing in October 2020     —         95,337  
Total convertible notes payable     —         2,112,060  
Current portion     —         (2,112,060 )
Total convertible notes payable, net   $ —       $ —    
v3.20.2
Note 12 - Note Payable
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 12 - Note Payable

Note 12 – Notes Payable

 

Notes payable consisted of the following at September 30, 2020 and December 31, 2019:

 

    2020   2019
Notes payable with maturities between six months and twelve months from the date of issuance with annual percentage interest rates between 24% and 31%   $ 7,058     $ 63,226  
SBA Paycheck Protection Program note payable issued in April 2020 with a maturity date of October 2022 and interest rate of 1%     311,125       —    
SBA Economic Injury Disaster Loan note payable issued in May 2020 with a maturity date of May 2051 and interest rate of 3.75%     150,000       —    
Demand note payable issued to former officers of Qualmetrix, Inc. with an annual percentage interest rate of 8%     —         16,200  
Note payable issued in June 2017 with a maturity date of June 2022 and effective interest rate of 10.66%     191,950       287,507  
Total notes payable     660,133       366,933  
Current portion     (510,133 )     (366,933 )
Total notes payable, net   $ 150,000     $ —    

Beginning in April 2018, the Company entered into a series of short-term notes with interest rates ranging from 24% to 31% per annum. Throughout the nine months ended September 30, 2020 the Company made average monthly principal and interest payments approximating $8,200 per month. The outstanding balance on the short-term notes at September 30, 2020 and December 31, 2019 was $7,058 and $63,226, respectively.

 

In October 2017, Qualmetrix entered into demand notes with its former Chief Executive Officer totaling $100,000. In January through April 2018, the Company issued additional notes to its former Chief Executive Officer totaling $92,000 maturing one year from the date of issuance. In April 2019, one of the notes was settled via a cash payment of interest and principal totaling 195,789. The outstanding balance of the note issued in January 2018 was $0 and $16,200 at September 30, 2020 and December 31, 2019, respectively and includes accrued interest of $1,200.

 

In June 2017, the Company entered into a Revenue Loan Investment for net working capital proceeds of $500,000. The Company is required to make monthly principal and interest payment on the Revenue Loan based on its net cash receipts from operations in the following 3 tiers:

 

  Tier 1 – Payments at a rate of 6.0% of the net cash receipts from the immediate month prior until cumulative loan payments are based on $2,500,000 of net cash receipts.

 

  Tier 2 – After achieving loan payments based on $2,500,000 of net cash receipts in a loan year, additional payments are based on 3.0% of amounts in excess of the Tier 1 Cap.

 

  Tier 3 – Payments at a rate of 0.5% of net cash receipts in excess of $3,200,000 in a loan year.

From the inception of the Revenue Loan in June 2017 through May 29, 2020 the Company has paid its monthly principal and interest payments based on the Tier 1 net cash receipts. Default interest on the Revenue Loan of $252,263 was recorded during the nine months ended September 30, 2020.

 

Principal on the Revenue Loan of $295,629, net of a $50,000 principal payment and the demand note payable of $15,000 and accrued interest of $1,600 were included in the Assumed Liabilities of the AHA Asset Purchase Agreement, as discussed in Note 1.

 

On May 22, 2020, the Company received loan proceeds of $150,000 pursuant to the U.S. Small Business Administration (“SBA”) COVID-19 Economic Injury Disaster Loan (EIDL) program.  Under the terms of the loan, Borrower must pay principal and interest payments of $731.00 every month beginning Twelve (12) months from the date of the Note. The SBA will apply each installment payment first to pay interest accrued to the day the SBA receives the payment and will then apply any remaining balance to reduce principal. All remaining principal and accrued interest is due and payable Thirty (30) years from the date of the Note. Borrower may prepay this Note in part or in full at any time, without notice or penalty.

 

The Company’s long-term debt is comprised of promissory notes pursuant to the Paycheck Protection Program and Economic Injury Disaster Loan (see below),  under Coronavirus Aid, Relief and Economic Security Act (“CARES ACT”) enacted on March 27, 2020 and revised under the provisions of the PayCheck Protection Flexibility Act of 2020 on June 5, 2020 and  administered by the  United States Small Business Administration (“SBA”).

 

On April 21, 2020, the Company received a loan in the amount of $333,125 under the Payroll Protection Program (“PPP Loan”). The loan accrues interest at a rate of 1% and has an original maturity date of two years which can be extended to five years by mutual agreement of the Company and SBA.  The PPP loan contains customary events of default relating to, among other things, payment defaults and breaches of representations and warranties.

 

Under the terms of the loan, a portion or all of the loan is forgivable to the extent the loan proceeds are used to fund qualifying payroll, rent and utilities during a designated twenty-four week period. Payments are deferred until the SBA determines the amount to be forgiven. The Company intends to utilize the proceeds of the PPP loan in a manner which will enable qualification as a forgivable loan. However, no assurance can be provided that all or any portion of the PPP loan will be forgiven. The balance on this PPP loan was $333,125 as of September 30, 2020 and has been classified as a long-term liability in notes payable, less current portion on the accompanying consolidated balance sheets.

v3.20.2
Note 13 - Stock Transactions
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 13 - Stock Transactions

Note 13 – Stock Transactions

 

Designation of Preferred Stock

 

On August 2, 2018, the Company filed a Certificate of Designation with the Delaware Division of Corporations whereby the Company designated a Series A Preferred Stock and issued 1,000 shares to the Company’s CEO. The holders of Series A Preferred Stock will have voting rights, when combined with their existing holdings of the Company’s common stock, that entitle them to have an aggregate of 51% of the votes eligible to be cast by all stockholders with respect to all matters brought before a vote of the stockholders of the Company. In connection with the Clinigence reverse merger on October 29, 2019, the Company filed a Certificate of Withdrawal of the Certificates of Designation, Preferences and Rights of the Series A Preferred Stock with the Delaware Secretary of State and returned all previously designated shares to their status as authorized preferred stock available for issuance.

 

Reverse Stock Split

 

On October 25, 2019, prior to the Clinigence reverse merger agreement, the Company effected a 1-for-500 reverse stock split of its common stock. On the effective date of the reverse stock split, each 500 shares of outstanding common stock were reduced to one share of common stock. All share and per share information presented have been adjusted on a retrospective basis to reflect this 1-for-500 reverse stock split.

 

Common Stock Issued

 

On August 8, 2018, the Board unanimously approved an amendment to the Company’s Articles of Incorporation to increase the number of shares of Common Stock which the Company is authorized to issue from Four hundred million (400,000,000) to Eight Hundred Million (800,000,000) shares of Common Stock, $0.001 par value per share.

 

In connection with the acquisition of Qualmetrix the Company issued 1,124,594 common shares valued at $3.71 per share to the shareholders of Qualmetrix on March 1, 2019.

 

The Company sold 479,468 shares of common stock to various investors valued at $5.56 per share in the first quarter of 2019 for proceeds of $2,665,000.

 

The Company issued 212,522 restricted common shares for services in connection with the Qualmetrix acquisition on March 1, 2019, valued at $308,157.

 

The Company issued 225,820 restricted common shares to employees for salaries on June 30, 2020, valued at $361,312. On September 28, 2020, 23,276 of these shares issued to an employee, valued at $33,750 were cancelled in connection with a separation agreement.

 

The Company issued 228,346 common shares to an employee in connection with a separation agreement on July 12, 2020, valued at $290,000.

 

On August 12, 2020, the Company sold 190,476 restricted shares of common stock valued at $.63 per share to 5 directors and an investor for proceeds of $120,000.

 

The Company issued 12,000 common shares to an employee in connection with a separation agreement on September 11, 2020, valued at $15,000.

v3.20.2
Note 14 - Income Taxes
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 14 - Income Taxes

Note 14 - Income Taxes

 

A full valuation allowance was recorded against the Company’s net deferred tax assets. A valuation allowance must be established if it is more likely than not that the deferred tax assets will not be realized. This assessment is based upon consideration of available positive and negative evidence, which includes, among other things, the Company’s most recent results of operations and expected future profitability. Based on the Company’s cumulative losses in recent years, a full valuation allowance against the Company’s deferred tax assets has been established as Management believes that the Company will not realize the benefit of those deferred tax assets.

v3.20.2
Note 15 - Concentrations and Credit Risk
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 15 - Concentrations and Credit Risk

Note 15 – Concentrations and Credit Risk

 

Sales and Accounts Receivable

 

The Company had sales to three customers which accounted for approximately 14%, 10% and 10%, respectively of total sales for the nine months ended September 30, 2020. Two of the three customers accounted for 24% and 14%, respectively of accounts receivable at September 30, 2020.

 

The Company had sales to three customers which accounted for approximately 19%, 17%, and 11%, respectively of total sales for the nine months ended September 30, 2019. Two of the three customers accounted for 27% and 8%, respectively of accounts receivable at September 30, 2019.

 

Cash

 

Cash is maintained at a major financial institution. Accounts held at U.S. financial institutions are insured by the FDIC up to $250,000. Cash balances could exceed insured amounts at any given time, however, the Company has not experienced any such losses. The Company did not have any interest-bearing accounts at September 30, 2020 and December 31, 2019, respectively.

v3.20.2
Note 16 - Related Party Transactions
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 16 - Related Party Transactions

Note 16 - Related Party Transactions

 

Due to Related Parties

 

Due to related parties with a balance of $0 and $128,477 at September 30, 2020 and December 31, 2019, respectively, does not bear interest and is payable on demand. The Company’s former subsidiary, Arcmail owed amounts on a credit card that is guaranteed by the husband of the Company’s Chief Financial Officer, who was held personally responsible by the credit card company for the unpaid balance. The balance of $128,477 was included in the Assumed Liabilities of the AHA Asset Purchase Agreement.

 

During the first quarter of 2019, the Chairman Warren Hosseinion made a $300,000 equity investment and was issued 21,590 warrants pursuant to the Equity Private Placement Memorandum.

During the first quarter of 2019, Director Mark Fawcett made a $50,000 equity investment and was issued 3,598 warrants pursuant to the Equity Private Placement Memorandum.

v3.20.2
Note 17 - Commitments and Contingencies
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 17 - Commitments and Contingencies

Note 17 – Commitments and Contingencies

 

Employment Arrangements With Executive Officers

 

Effective October 29, 2019, in connection with the merger with Clinigence Health, the Company entered into employment agreements with Jacob Margolin, Lawrence Schimmel, and Elisa Luqman each under a three-year term at a base salary of $180,000, $180,000 and $150,000, respectively plus customary employee benefits. The Company’s CEO, Jacob Margolin resigned from his employment effective July 11, 2020 and entered into a separation agreement with the Company. Under the terms of the separation agreement, Mr. Margolin received a one-time cash severance payment of $20,000 on the separation date and will receive a cash payment of $72,000 payable in 12 equal monthly payments of $6,000 beginning on August 15, 2020, and 228,346 shares of the Company’s common stock, valued at $290,000.

 

Effective April 1, 2017, in connection with the acquisition of HealthDatix Inc., the Company entered into employment agreements with Jerry Robinson, MaryJo Robinson, and Kathleen Shepherd each under a three-year term at a base salary of $75,000 per year, bonuses based upon objectives set by the Company, and participation in all benefit programs generally made available to HealthDatix employees. The employment agreements restrict the executive officers from engaging in certain competitive activities for the greater of 60 months from the date of the agreements or two years following the termination of their respective employment. The employment agreements were terminated in connection with the sale of HealthDatix effective March 1, 2020.

v3.20.2
Note 18 - Subsequent Events
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Note 18 - Subsequent Events

Note 18 – Subsequent Events

 

The Company evaluated events and transactions subsequent to September 30, 2020 through the date the consolidated financial statements were issued.

v3.20.2
Note 3 - Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2020
Policy Text Block [Abstract]  
Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Clinigence Health, Inc., HealthDatix Inc.  All intercompany accounts and transactions have been eliminated.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of Financial Statements

 

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

Fair Value Measurements

Fair Value Measurements

 

The Company adopted the provisions of ASC Topic 820, Fair Value Measurements and Disclosures, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short- and long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk. The Company’s investment in AHA was valued at level 3 input.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 – quoted prices in active markets for identical assets or liabilities

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 – inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

Convertible Instruments

Convertible Instruments

 

The Company evaluates and accounts for conversion options embedded in convertible instruments in accordance with ASC 815, Derivatives and Hedging Activities.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

The Company accounts for convertible instruments (when it has been determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption.

The Company accounts for the conversion of convertible debt when a conversion option has been bifurcated using the general extinguishment standards. The debt and equity linked derivatives are removed at their carrying amounts and the shares issued are measured at their then-current fair value, with any difference recorded as a gain or loss on extinguishment of the two separate accounting liabilities.

Revenue Recognition

Revenue Recognition

 

Revenue is generated primarily by software licenses, training, and consulting. Software licenses are provided as SaaS-based subscriptions that grants access to proprietary online databases and data management solutions. Training and consulting are project based and billable to customers on a monthly-basis or task-basis.

 

Revenue from training and consulting are generally recognized upon delivery of training or completion of the consulting project. The duration of training and consulting projects are typically a few weeks or months and last no longer than 12 months.

 

SaaS-based subscriptions are generally marketed under multi-year agreements with annual, semi-annual, quarterly, or month-to-month renewals and revenue is recognized ratably over the renewal period with the unearned amounts received recorded as deferred revenue. For multiple-element arrangements accounted for in accordance with specific software accounting guidance, multiple deliverables are segregated into units of accounting which are delivered items that have value to a customer on a standalone basis.

 

On January 1, 2019, the Company adopted the new revenue recognition standard Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”, using the modified retrospective method. The modified retrospective adoption used by the Company did not result in a material cumulative effect adjustment to the opening balance of accumulated deficit. Revenue from substantially all the Company’s contracts with customers continues to be recognized over time as performance obligations are satisfied.

 

The Company provides its customers with software licensing, training, and consulting through SaaS-based subscriptions. This subscription revenue represents revenue earned under contracts in which the Company bills and collects the charges for licensing and related services. The Company determines the measurement of revenue and the timing of revenue recognition utilizing the following core principles:

 

1.   Identifying the contract with a customer;

 

2.   Identifying the performance obligations in the contract;

 

3.   Determining the transaction price;

 

4.   Allocating the transaction price to the performance obligations in the contract; and

 

5.   Recognizing revenue when (or as) the Company satisfies its performance obligations.

 

Revenues from subscriptions are deferred and recorded as deferred revenue when cash payments are received in advance of the satisfaction of the Company’s performance obligations and recognized over the period in which the performance obligations are satisfied. The Company completes its contractual performance obligations through providing its customers access to specified data through subscriptions for a service period, and training on consulting associated with the subscriptions. The Company primarily invoices its customers on a monthly basis and does not provide any refunds, rights of return, or warranties to its customers.

Advertising Costs

Advertising Costs

 

The Company expenses advertising costs as incurred. Advertising costs of $41,418 and $111,720 were charged to operations for the nine months ended September 30, 2020 and 2019, respectively. Advertising costs of $7,627 and $72,801 were charged to operations for the three months ended September 30, 2020 and 2019, respectively.

Cash and Cash Equivalents

Cash and Cash Equivalents

 

Cash and cash equivalents are comprised of cash and highly liquid investments with original maturities of 90 days or less at the date of purchase. The Company does not have any cash equivalents as of September 30, 2020 and December 31, 2019. The Company is exposed to credit risk in the event of default by the financial institutions or the issuers of these investments to the extent the amounts on deposit or invested are in excess of amounts that are insured.

Accounts Receivable

Accounts Receivable

 

The Company analyzes the collectability of accounts receivable from continuing operations each accounting period and adjusts its allowance for doubtful accounts accordingly.  A considerable amount of judgment is required in assessing the realization of accounts receivables, including the creditworthiness of each customer, current and historical collection history and the related aging of past due balances.  The Company evaluates specific accounts when it becomes aware of information indicating that a customer may not be able to meet its financial obligations due to deterioration of its financial condition, lower credit ratings, bankruptcy or other factors affecting the ability to render payment.

Inventory

Inventory

 

Inventory consisting of finished products is stated at the lower of cost or net realizable value.

Property and equipment and depreciation

Property and equipment and depreciation

 

Property and equipment are stated at cost. Maintenance and repairs are charged to expense when incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gain or loss is credited or charged to income. Depreciation for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over the estimated lives of the respective assets as follows:

 

Office equipment and fixtures     5 - 7 years  
Computer hardware     5 years  
Computer software     3 years  
Development equipment     5 years  
Amortization

Amortization

Intangible assets are amortized using the straight line method over the estimated lives of the respective assets as follows:

 

Developed technology     13 years  
Customer relationships     10 years  
Long-Lived Assets

Long-Lived Assets

 

The Company assesses the valuation of components of its property and equipment and other long-lived assets whenever events or circumstances dictate that the carrying value might not be recoverable. The Company bases its evaluation on indicators such as the nature of the assets, the future economic benefit of the assets, any historical or future profitability measurements and other external market conditions or factors that may be present. If such factors indicate that the carrying amount of an asset or asset group may not be recoverable, the Company determines whether an impairment has occurred by analyzing an estimate of undiscounted future cash flows at the lowest level for which identifiable cash flows exist. If the estimate of undiscounted cash flows during the estimated useful life of the asset is less than the carrying value of the asset, the Company recognizes a loss for the difference between the carrying value of the asset and its estimated fair value, generally measured by the present value of the estimated cash flows.

Deferred Revenue

Deferred Revenue

 

Deposits from customers are not recognized as revenues, but as liabilities, until the following conditions are met: revenues are realized when cash or claims to cash (receivable) are received in exchange for goods or services or when assets received in such exchange are readily convertible to cash or claim to cash or when such goods/services are transferred. When such income item is earned, the related revenue item is recognized, and the deferred revenue is reduced. To the extent revenues are generated from the Company’s support and maintenance services, the Company recognizes such revenues when services are completed and billed. The Company has received deposits from its various customers that have been recorded as deferred revenue and presented as current liabilities in the amount of $17,062 and $165,560 as of September 30, 2020 and December 31, 2019, respectively.

Stock-Based Compensation

Stock-Based Compensation

 

The Company accounts for its stock-based awards granted under its employee compensation plan in accordance with ASC Topic No. 718-20, Awards Classified as Equity, which requires the measurement of compensation expense for all share-based compensation granted to employees and non-employee directors at fair value on the date of grant and recognition of compensation expense over the related service period for awards expected to vest.  The Company uses the Black-Scholes option pricing model to estimate the fair value of its stock options and warrants. The Black-Scholes option pricing model requires the input of highly subjective assumptions including the expected stock price volatility of the Company’s common stock, the risk free interest rate at the date of grant, the expected vesting term of the grant, expected dividends, and an assumption related to forfeitures of such grants.  Changes in these subjective input assumptions can materially affect the fair value estimate of the Company’s stock options and warrants.

Income Taxes

Income Taxes

 

The Company accounts for income taxes using the asset and liability method in accordance with ASC Topic No. 740, Income Taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse.

 

The Company applies the provisions of ASC Topic No. 740 for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the Company’s financial statements. In accordance with this provision, tax positions must meet a more-likely-than-not recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

We have reviewed other recent accounting pronouncements and concluded they are either not applicable to the business, or no material effect is expected on the condensed consolidated financial statements as a result of future adoption.

v3.20.2
Note 1 - Organization and Basis of Presentation (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Schedule of Assumed Liabilities

The Assumed Liabilities consist of the following:

 

Convertible notes payable   $ 2,442,875  
Related party loan payable     128,477  
Note payable - Jerrold Young     15,000  
Note payable - Lighter Capital     295,629  
Accounts payable     323,563  
Accrued interest on notes payable     72,891  
    $ 3,278,435  
Schedule of Gain on sale of assets

Gain on sale of assets reported in the statements of operations consists of the following:

 

Fair value of AHA Series E Preferred Stock received   $ 6,402,278  
Assumed liabilities     3,278,435  
Less assets sold:        
Intangible assets     (1,476,961 )
Goodwill     (3,471,508 )
Gain on sale of assets   $ 4,732,244  
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table represents the fair value of the consideration paid allocated to the assets and liabilities acquired in applying the acquisition method for the completion of the reverse merger:

 

Consideration:    
Issuance of 797,108 shares of common stock   $ 836,963  
Net liabilities assumed     1,467,897  
Total consideration   $ 2,304,860  
         
Assets Acquired:        
Current assets   $ 46,209  
Property, equipment, and other non-current assets     1,593  
Goodwill     2,257,058  
Total assets acquired   $ 2,304,860  

 

The following table represents the fair value of the consideration paid allocated to the assets and liabilities acquired in applying the acquisition method for the completion of the Qualmetrix, Inc. business combination:

 

Consideration:    
Issuance of 5,021,950 shares of common stock   $ 4,168,219  
Net liabilities assumed     989,805  
Total consideration   $ 5,158,024  
         
Assets Acquired:        
Current assets   $ 24,698  
Property, equipment, and other non-current assets     7,818  
Identifiable intangible assets     1,654,000  
Goodwill     3,471,508  
Total assets acquired   $ 5,158,024  
v3.20.2
Note 2 - Discontinued Operations (Tables)
9 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued operations

The components of income from discontinued operations presented in the consolidated statements of operations for the nine months ended September 30, 2020 are presented as follows:

 

Sales   $ 5,958  
Cost of sales     (6,795 )
General and administrative expenses     (101,100 )
Depreciation and amortization     (75 )
Interest expense     (263 )
Loss from operations     (102,275 )
Gain on disposal of HealthDatix     142,027  
Income from discontinued operations   $ 39,752  
v3.20.2
Note 3 - Summary of Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Schedule of estimated lives of respective assets

Depreciation for both financial reporting and income tax purposes is computed using combinations of the straight line and accelerated methods over the estimated lives of the respective assets as follows:

 

Office equipment and fixtures     5 - 7 years  
Computer hardware     5 years  
Computer software     3 years  
Development equipment     5 years  
Schedule of estimated lives of the respective assets

Intangible assets are amortized using the straight line method over the estimated lives of the respective assets as follows:

 

Developed technology     13 years  
Customer relationships     10 years  
v3.20.2
Note 5 - Property and Equipment (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Schedule of property, plant and equipment

Property and equipment are carried at cost and consist of the following at September 30, 2020 and December 31, 2019:

 

    2020   2019
Office equipment and fixtures   $ 106,769     $ 109,468  
Computer hardware     41,066       44,866  
Computer software     16,121       16,121  
Less: Accumulated depreciation     97,229       87,102  
    $ 66,727     $ 83,353  
v3.20.2
Note 7 - Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Schedule of intangible assets

The following tables provide detail associated with the Company’s acquired identifiable intangible assets:

 

    As of December 31, 2019
     

Gross Carrying

Amount

     

Accumulated

Amortization

     

Net Carrying

Amount

     

Weighted

Average

Useful Life

(in years)

 
Amortized intangible assets:                                
Customer relationships   $ 624,000     $ (52,000 )   $ 572,000       10  
Developed technology     1,030,000       (66,026 )     963,974       13  
Total   $ 1,654,000     $ (118,026 )   $ 1,535,974          

 

Aggregate Amortization Expense:    
For the nine months ended September 30, 2020   $ 59,013  
v3.20.2
Note 8 - Operating Lease (Tables)
9 Months Ended
Sep. 30, 2020
Leases, Operating [Abstract]  
Operating lease ROU assets and operating lease liabilities

Operating lease ROU assets and operating lease liabilities are recorded on the consolidated balance sheet as follows: 

 

    September 30,
    2020
Operating Lease:        
Operating lease right-of-use assets, net   $ 211,448  
Current portion of operating lease liabilities     54,564  
Operating lease liabilities, net of current portion     182,059  
Schedule of Future Minimum Rental Payments for Operating Lease

The following table summarizes maturities of operating lease liabilities based on lease term as of September 30, 2020:

 

2020   $ 16,925  
2021     69,393  
2022     71,474  
2023     73,619  
2024     37,729  
Total lease payments     269,140  
Less: Imputed interest     32,517  
Present value of lease liabilities   $ 236,623  
Schedule of future minimum payments due under the non-cancelable lease

At September 30, 2020, the Company had the following future minimum payments due under the non-cancelable lease:

 

2020   $ 16,925  
2021     69,393  
2022     71,474  
2023     73,619  
2024     37,729  
Total minimum lease payments   $ 269,140  
Summary of cash paid and related right-of-use operating lease

The following table summarizes the cash paid and related right-of-use operating lease recognized for the nine months ended September 30, 2020.

 

    Nine Months Ended
    September 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:        
Operating cash flows from operating leases   $ 50,446  
Right-of-use lease assets obtained in the exchange for lease liabilities:        
Operating leases     37,401  
v3.20.2
Note 9 - Earnings (Loss) Per Common Share (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Computation of diluted net income (loss) per share

The Company’s potentially dilutive shares, which include outstanding common stock options, common stock warrants, and convertible debt have not been included in the computation of diluted net loss per share for the nine months ended September 30, 2020 and 2019 as the result would be anti-dilutive.

 

    Nine Months Ended
    September 30,
    2020   2019
Stock options     1,174,814       —    
Stock warrants     557,873       529,685  
Total shares excluded from calculation     1,732,687       529,685  
v3.20.2
Note 10 - Stock Based Compensation (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Schedule of stock option activities

Stock option activity during the nine months ended September 30, 2020 and 2019 follows:

 

    Options Outstanding   Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (Years)
Options outstanding at December 31, 2018     —       $ —         —    
No option activity     —         —            
Options outstanding at  September 30, 2019     —       $ –—         —    
Options outstanding at December 31, 2019     48,854     $ 5.11       8.05  
Options granted     1,130,734       1.49          
Options expired     (400 )     0.01          
Options cancelled     (4,374 )     5.56          
Options outstanding at  September 30, 2020     1,174,814     $ 1.61       8.36  
Schedule of stock options outstanding

Options outstanding at September 30, 2020 consist of:

 

Date Issued   Number Outstanding   Number Exercisable   Exercise Price   Expiration Date
August 5, 2019     40,480       40,480     $ 5.56     August 5, 2029
October 29, 2019     3,600       3,600     $ 0.0725     June 6, 2027
January 27, 2020     307,884       307,884     $ 1.50     January 27, 2030
January 27, 2020     225,000       225,000     $ 1.50     January 27, 2027
February 29, 2020     95,794       95,794     $ 1.25     February 28, 2030
May 11, 2020     380,000       380,000     $ 1.50     May 11, 2027
June 30, 2020     122,056       122,056     $ 1.45     June 30, 2030
Total     1,174,814       1,174,814              
Schedule of Warrants, Activity

Warrant activity during the nine months ended September 30, 2020 and 2019 follows:

 

   

Warrants

Outstanding

  Weighted Average Exercise Price   Weighted Average Remaining Contractual Life (Years)
Warrants outstanding at December 31, 2018     138,997     $ 0.81       5.55  
Warrants granted     529,685       6.67          
Warrants cancelled     (138,997 )     0.81          
Warrants outstanding at September 30, 2019     529,685     $ 6.67       5.26  
Warrants outstanding at December 31, 2019     1,065,251     $ 6.04          
Warrants canceled     (507,378 )     —            
Warrants outstanding at September 30, 2020     557,873     $ 6.77       4.04  
Schedule of Outstanding Warrants

Warrants outstanding at September 30, 2020 consist of:

 

Date Issued   Number Outstanding   Number Exercisable   Exercise Price   Expiration Date
March 21, 2019     96,433       96,433     $ 6.67     December 31, 2024
April 30, 2019     3,598       3,598     $ 6.67     December 31, 2024
May 13, 2019     14,393       14,393     $ 6.67     December 31, 2024
May 28, 2019     199,703       199,703     $ 6.67     December 31, 2024
June 5, 2019     7,197       7,197     $ 6.67     December 31, 2024
June 25, 2019     208,361       208,361     $ 6.67     December 31, 2024
September 6, 2019     25,188       25,188     $ 6.67     December 31, 2024
October 29, 2019     1,500       1,500     $ 25.00     February 5, 2023
October 29, 2019     1,500       1,500     $ 25.00     April 27, 2023
Total     557,873       557,873              
v3.20.2
Note 11 - Convertible notes payable (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Schedule of Convertible notes payable

Convertible notes payable consisted of the following at September 30, 2020 and December 31, 2019:

 

    2020   2019
Notes payable convertible into Clinigence common shares at $5.56 per share; bearing interest at a rate of 10%; net of debt discount of $0 and $328,652, respectively; maturing in October 2020   $ —       $ 2,016,723  
Notes payable convertible into Clinigence common shares at $1.25 per share; bearing interest at a rate of 10%; net of debt discount of $1,100 and $2,163, respectively; maturing in October 2020     —         95,337  
Total convertible notes payable     —         2,112,060  
Current portion     —         (2,112,060 )
Total convertible notes payable, net   $ —       $ —    
v3.20.2
Note 12 - Note Payable (Tables)
9 Months Ended
Sep. 30, 2020
Disclosure Text Block [Abstract]  
Notes payable

Notes payable consisted of the following at September 30, 2020 and December 31, 2019:

 

    2020   2019
Notes payable with maturities between six months and twelve months from the date of issuance with annual percentage interest rates between 24% and 31%   $ 7,058     $ 63,226  
SBA Paycheck Protection Program note payable issued in April 2020 with a maturity date of October 2022 and interest rate of 1%     311,125       —    
SBA Economic Injury Disaster Loan note payable issued in May 2020 with a maturity date of May 2051 and interest rate of 3.75%     150,000       —    
Demand note payable issued to former officers of Qualmetrix, Inc. with an annual percentage interest rate of 8%     —         16,200  
Note payable issued in June 2017 with a maturity date of June 2022 and effective interest rate of 10.66%     191,950       287,507  
Total notes payable     660,133       366,933  
Current portion     (510,133 )     (366,933 )
Total notes payable, net   $ 150,000     $ —    
v3.20.2
Note 1 - Organization and Basis of Presentation (Details 1)
Sep. 30, 2020
USD ($)
Assumed Liabilities $ 3,278,435
Convertible Notes Payable [Member]  
Assumed Liabilities 2,442,875
Related Party Loan Payable [Member]  
Assumed Liabilities 128,477
Note payable Jerrold Young [Member]  
Assumed Liabilities 15,000
Note payable Lighter Capital [Member]  
Assumed Liabilities 295,629
Accounts Payable [Member]  
Assumed Liabilities 323,563
Accrued Interest [Member]  
Assumed Liabilities $ 72,891
v3.20.2
Note 1 - Organization and Basis of Presentation (Details 2)
9 Months Ended
Sep. 30, 2020
USD ($)
Assumed liabilities $ 3,278,435
Less assets sold:  
Intangible assets (1,476,961)
Goodwill (3,471,508)
Gain on sale of assets 4,732,244
AHA [Member]  
Investment $ 6,402,278
v3.20.2
Note 1 - Organization and Basis of Presentation (Details 3) - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Mar. 01, 2019
Consideration:      
Net liabilities assumed $ (3,471,508)    
Assets Acquired:      
Goodwill 0 $ 3,471,508  
iGambit      
Consideration:      
Issuance of common stock 836,963    
Net liabilities assumed 1,467,897    
Total consideration 2,304,860    
Assets Acquired:      
Current assets 46,209    
Property, equipment, and other non-current assets 1,593    
Goodwill 2,257,058    
Total assets acquired $ 2,304,860    
Qualmetrix      
Consideration:      
Issuance of common stock     $ 4,168,219
Net liabilities assumed     989,805
Total consideration     5,158,024
Assets Acquired:      
Current assets     24,698
Property, equipment, and other non-current assets     7,818
Identifiable intangible assets     1,654,000
Goodwill     3,471,508
Total assets acquired     $ 5,158,024
v3.20.2
Note 1 - Organization and Basis of Presentation (Details Narrative)
9 Months Ended
Sep. 30, 2020
USD ($)
$ / shares
shares
Preferred Stock Initial stated value $ 15,000,000
Preferred Stock description After two hundred and forty (240) days from the date of Closing, if the merger with or an acquisition by a Publicly Traded Company has not occurred, the Preferred Stock shall automatically convert into 3,750,000 of Common Shares of Stock of the Purchaser, based upon a $4 per share valuation on the date of Conversion
Assumed Liabilities, Net [Member]  
Preferred Stock Initial stated value $ 15,000,000
Series E Convertible Preferred Stock [Member]  
Exchange of shares | shares 1,252,892
AHA [Member]  
Investment $ 6,402,278
Fair value | $ / shares $ 5.11
Qualmetrix  
Exchange of shares | shares 5,021,950
Fair value | $ / shares $ 0.83