0001213900-22-020174 | 10-K | XBRL Viewer

ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES

NOTE 1 - ORGANIZATION AND PRINCIPAL BUSINESS ACTIVITIES

LogicMark, Inc. (“LogicMark” or the “Company”), formerly called Nxt-ID, Inc., was incorporated in the State of Delaware on February 8, 2012. LogicMark operates its business in one segment and provides personal emergency response systems (PERS), health communications devices, and IoT technology that creates a connected care platform. The Company’s devices give people the ability to receive care at home and confidence to age independently. LogicMark revolutionized the PERS industry by incorporating two-way voice communication technology directly in the medical alert pendant and providing life-saving technology at a price point everyday consumers could afford. The PERS technologies are sold through dealers and distributors, as well as to the United States Veterans Health Administration.

The Company manufactures and distributes non-monitored and monitored personal emergency response systems sold through the United States Department of Veterans Affairs, healthcare durable medical equipment dealers and distributors and monitored security dealers and distributors.

On December 30, 2021, the Company’s two operating subsidiaries, LogicMark LLC and 3D-ID LLC, were merged into Nxt-ID, Inc. and the separate legal existences of LogicMark LLC and 3D-ID LLC ceased. On February 28, 2022, the name of the Company was changed to LogicMark, Inc.

Liquidity and Management Plans

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

LIQUIDITY AND MANAGEMENT PLANS

NOTE 2 - LIQUIDITY AND MANAGEMENT PLANS

The Company generated an operating loss of $7,547,456 and a net loss of $11,707,889 for the year ended December 31, 2021. As of December 31, 2021, the Company had cash and stockholders’ equity of $12,044,415 and $26,589,171, respectively. At December 31, 2021, the Company had a working capital of $13,098,049 compared to a working capital deficiency as of December 31, 2020 of $578,795. During the year ended December 31, 2021, the Company received proceeds of $26,669,788 from the issuance of common stock and warrants, and the exercise of common stock purchase warrants.

Given the Company’s cash position at December 31, 2021 and its projected cash flow from operations, the Company believes that it will have sufficient capital to sustain operations for a period of one year following the date of this filing. The Company may also raise funds through equity or debt offerings to accelerate the execution of its long-term strategic plan to develop and commercialize its core products and to fulfill its product development commitments.

Basis of Presentation

12 Months Ended

Dec. 31, 2021

BASIS OF PRESENTATION

NOTE 3 – BASIS OF PRESENTATION

Net loss per share and all share data for the year December 31, 2020 have been retroactively adjusted to reflect the reverse stock split that occurred in October 2021, in accordance with ASC 260-10-55-12, Restatement of EPS Data. See Note 9.

Certain prior year amounts have been reclassified to conform to the current year presentation.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES IN THE FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management evaluates these significant estimates and assumptions, including those related to the fair value of acquired assets and liabilities, stock-based compensation, income taxes, allowance for doubtful accounts, long-lived assets, and inventories, and other matters that affect the financial statements and disclosures. Actual results could differ from those estimates.

CASH

The Company considers all highly liquid securities with an original maturity date of three months or less when purchased to be cash equivalents. Due to their short-term nature, cash equivalents are carried at cost, which approximates fair value. At December 31, 2021 and 2020, the Company had no cash equivalents.

RESTRICTED CASH

At December 31, 2021 and 2020, the Company had restricted cash of $210,131 and $150,130, respectively. Restricted cash includes amounts held back by the Company’s third-party credit card processor for potential customer refunds, claims and disputes and held as collateral for company credit cards. Cash and restricted cash, as presented on the statements of cash flows, consists of $12,044,415 and $210,131 as of December 31, 2021, respectively, and $4,387,416 and $150,130 as of December 31, 2020.

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains its cash balances in large well-established financial institutions located in the United States. At times, the Company’s cash balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

REVENUE RECOGNITION

The Company’s revenues consist of product sales to either end customers or to distributors. The Company’s revenues are derived from contracts with customers, which are in most cases customer purchase orders. For each contract, the promise to transfer the control of the products, each of which is individually distinct, is considered to be the identified performance obligation. As part of the consideration promised in each contract, the Company evaluates the customer’s credit risk. Our contracts do not have any financing components, as payment terms are generally due net 30 days after the invoice date. The Company’s products are almost always sold at fixed prices. In determining the transaction price, we evaluate whether the price is subject to any refunds, due to product returns or adjustments due to volume discounts, rebates or price concessions to determine the net consideration we expect to be entitled to. The Company’s sales are recognized at a point-in-time under the core principle of recognizing revenue when control transfers to the customer, which generally occurs when the Company ships or delivers the product from its fulfillment center to our customers, when our customer accepts and has legal title of the goods, and the Company has a present right to payment for such goods. Based on the respective contract terms, most of our contracts revenues are recognized either (i) upon shipment based on free on board (“FOB”) shipping point, or (ii) when the product arrives at its destination. For the years ended December 31, 2021 and 2020, none of our sales were recognized over time.

SALES TO DISTRIBUTORS AND RESELLERS

Sales to certain distributors and resellers are made under terms allowing limited rights of return of the Company’s products held in their inventory or upon sale to their end customers. The Company maintains a reserve for unprocessed and estimated future price adjustments claims and returns as a refund liability. The reserve is recorded as a reduction to revenue in the same period that the related revenue is recorded and is calculated based on an analysis of historical claims and returns over a period of time to appropriately account for current pricing and business trends. Similarly, sales returns and allowances are recorded based on historical return rates, as a reduction to revenue with a corresponding reduction to cost of sales for the estimated cost of inventory that is expected to be returned. These reserves were not material upon the adoption of Topic 606 on January 1, 2018, nor were they material in the balance sheet at December 31, 2021 and 2020.

SHIPPING AND HANDLING

Amounts billed to customers for shipping and handling are included in revenues. The related freight charges incurred by the Company are included in cost of goods sold and were $492,566 and $524,481, respectively, for the years ended December 31, 2021 and 2020.

ACCOUNTS RECEIVABLE

For the years ended December 31, 2021 and 2020, the Company’s revenues primarily included shipments of the LogicMark products. The terms and conditions of these sales provide certain customers with trade credit terms. In addition, these sales were made to the retailers with no rights of return and are subject to the normal warranties offered to the ultimate consumer for product defects.

Accounts receivable is stated at net realizable value. The Company regularly reviews accounts receivable balances and adjusts the receivable reserves as necessary whenever events or circumstances indicate the carrying value may not be recoverable. At December 31, 2021 and 2020, the Company had an allowance for doubtful accounts of $5,411 and $126,733, respectively.

INVENTORY

The Company measures inventory at the lower of cost or net realizable value, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.

The Company performs regular reviews of inventory quantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessary with estimated valuation reserves for excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or production requirements. The inventory is valued at the lower of cost or net realizable value with cost determined using the first-in, first-out method. As of December 31, 2021, inventory was comprised of $1,237,280 in finished goods on hand. In addition, during 2021 we wrote down inventory totaling $314,000. As of December 31, 2020 inventory was comprised of $199,523 in raw materials and $567,828 in finished goods on hand. The Company is required to prepay for certain inventory with certain vendors until credit terms can be established. As of December 31, 2021 and 2020, $559,938 and $332,475 respectively, of prepayments made for inventory is included in prepaid expenses and other current assets on the balance sheet.

LONG-LIVED ASSETS

Long-lived assets, such as property and equipment, and other intangibles are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. When indicators exist, the Company tests for the impairment of the definite-lived assets based on the undiscounted future cash flow the assets are expected to generate over their remaining useful lives, compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to the Company’s business operations.

PROPERTY AND EQUIPMENT

Property and equipment consisting of furniture, fixtures and tooling is stated at cost. The costs of additions and improvements are generally capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful life of the respective asset as follows:

Equipment	5 years
Furniture and fixtures	3 to 5 years
Tooling and molds	2 to 3 years

GOODWILL

Goodwill is reviewed annually in the fourth quarter, or when circumstances indicate that an impairment may have occurred. The Company first performs a qualitative assessment of goodwill impairment, which considers factors such as market conditions, performance compared to forecast, business outlook and unusual events. If the qualitative assessment indicates a possible goodwill impairment, goodwill is then quantitatively tested for impairment. The Company may elect to bypass the qualitative assessment and proceed directly to the quantitative test. If a quantitative goodwill impairment test is required, the fair value is determined using a variety of assumptions including estimated future cash flows using applicable discount rates (income approach) and comparisons to other similar companies (market approach).

As part of the annual evaluation of goodwill in 2021, the Company determined that it is more likely than not that the carrying value of goodwill exceeded its fair value, and therefore an impairment write-down was required. During the year ended December 31, 2021, the Company wrote down the carrying value of goodwill by $4,521,000. See Note 5.

OTHER INTANGIBLE ASSETS

The Company’s intangible assets are related to the acquisition of LogicMark and are included in other intangible assets in the Company’s balance sheet at December 31, 2021 and 2020.

At December 31, 2021, the other intangible assets are comprised of patents of $2,072,984; trademarks of $915,619; and customer relationships of $1,488,044. At December 31, 2020, the other intangible assets are comprised of patents of $2,445,709; trademarks of $978,494; and customer relationships of $1,814,259. The Company amortizes these intangible assets using the straight-line method over their estimated useful lives which for the patents, trademarks and customer relationships are 11 years, 20 years, and 10 years, respectively. During the years ended December 31, 2021 and 2020, the Company had amortization expense of $761,815 each year.

Amortization expense estimated for each of the next five fiscal years, 2022 through 2026, is expected to be approximately $762,000 per year for the first four years, $619,000 for the fifth year, and fully amortized in 2036.

CONVERTIBLE INSTRUMENTS

The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to separate conversion options from their host instruments and account for them as free-standing derivatives according to certain criteria. The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative and the host contract is not re-measured at fair value under generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative would be considered a derivative. The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in the results of operations.

Conversion options with variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of at exercise prices more favorable than that in the hybrid contract generally result in their separation from the host instrument.

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. The debt discounts under these arrangements are amortized over the earlier of (i) the term of the related debt using the straight-line method which approximates the interest rate method or (ii) conversion of the debt. The amortization of debt discount is included as interest expense included in other income and expenses in the statements of operations.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company does not use derivatives to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Derivative financial instruments accounted for as liabilities are initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivatives, the Company uses the Black-Scholes or binomial option valuation model to value the derivatives at inception and on subsequent valuation dates. The Company accounts for conversion features that are embedded within the Company’s convertible notes payable that do not have fixed settlement provisions as a separate derivative. In addition, warrants issued by the Company that do not have fixed settlement provisions are also treated as derivatives. The classification of derivatives, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative could be required within 12 months of the balance sheet date.

INCOME TAXES

The Company uses the asset and liability method of accounting for income taxes. Income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company will classify as income tax expense any interest and penalties. The Company has no material uncertain tax positions for any of the reporting periods presented. Generally, the tax authorities may examine tax returns for three years from the date of filing. The Company has filed all of its tax returns for all prior periods through December 31, 2020.

STOCK-BASED COMPENSATION

The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Stock-based compensation charges are amortized over the vesting period or as earned. Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash. The Company generally issues new shares of common stock to satisfy conversion and warrant exercises.

NET LOSS PER SHARE

Basic loss per share was computed using the weighted average number of common shares outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities from the exercise of stock options to purchase 36,467 shares of common stock and warrants to purchase 4,295,380 shares of common stock as of December 31, 2021 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. Potentially dilutive securities from the exercise of stock options to purchase 33,527 shares of common stock and warrants to purchase 1,569,007 shares of common stock as of December 31, 2020 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.

RESEARCH AND DEVELOPMENT

Research and development costs consist of expenditures incurred during the course of planned research and investigation aimed at the discovery of new knowledge, which will be useful in developing new products or processes. The Company expenses all research and development costs as incurred.

RECENT ACCOUNTING PRONOUNCEMENTS

Recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.

Goodwill Impairment

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL IMPAIRMENT

NOTE 5 – GOODWILL IMPAIRMENT

The Company performed a goodwill impairment analysis in 2021 and determined that the carrying value of its goodwill exceeded its fair value by approximately $4,521,000. As a result, the Company recorded a non-cash impairment charge to write down goodwill by that amount. The fair value was determined using the income approach. The Company believes the income approach is the most reliable indicator of fair value since it incorporates future estimated revenue and expense for the company that the market approach does not directly incorporate. In addition to future estimated revenue and expenses, the determination of fair value includes a discount rate assumption.

As of December 31, 2020, the Company determined that there were no indicators present to suggest that it was more likely than not that the fair value of goodwill was less than the carrying amount.

The Company’s goodwill relates entirely to the acquisition of LogicMark LLC in 2016. The Company will continue to monitor its goodwill on a quarterly basis for indicators of impairment including, but not limited to, further declines in the stock price. Accordingly, there may be further impairments.

Accrued Expenses

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

ACCRUED EXPENSES

NOTE 6 - ACCRUED EXPENSES

Accrued expenses consist of the following:

	December 31,
	2021		2020
Salaries, payroll taxes and vacation	$	54,229	$	130,093
Consulting fees		-		-
Merchant bank fees		17,853		19,754
State income taxes		0		38,672
Professional fees		104,500		226,794
Management incentives		285,000		500,419
Interest expense		-		128,187
Lease liability		64,346		54,476
Dividends – Series C and F Preferred Stock		94,933		25,000
Other		228,424		191,865
Totals	$	849,285	$	1,315,260

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 7 - FAIR VALUE MEASUREMENTS

The fair value of financial instruments is defined as an exit price, which is the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants. The degree of judgment used in measuring the fair value of assets and liabilities generally correlates to the level of pricing observability. Financial assets and liabilities with readily available, actively quoted prices or for which fair value can be measured from quoted prices in active markets generally have more pricing observability and require less judgment in measuring fair value. Conversely, financial assets and liabilities that are rarely traded or not quoted have less price observability and are generally measured at fair value using valuation models that require more judgment. These valuation techniques involve some level of management estimation and judgment, the degree to which depends on the price transparency of the asset, liability or market and the nature of the asset or liability. The Company has categorized its financial assets and liabilities measured at fair value into a three-level hierarchy.

Valuation Hierarchy

ASC 820, “Fair Value Measurements and Disclosures,” establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows.

	●	Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

	●	Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

●

Level 3 inputs are unobservable inputs based on the Company’s own assumptions used to measure assets and liabilities at fair value.

The classification of a financial asset or liability within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

Cash and accounts payable approximate their fair values due to their short maturities. The Company’s other financial instruments, at December 31, 2020, include its convertible notes payable. The carrying value of these instruments approximate fair value, as they bear terms comparable to market, for obligations with similar terms and maturities. The Company measures the fair value of financial assets and liabilities based on 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. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

DEBT

NOTE 8 - DEBT

On May 3, 2019, the Company completed the closing of a $16,500,000 senior secured term loan with the lenders and CrowdOut Capital LLC, as administrative agent. The Company used the proceeds from the term loan to repay its existing term loan facility with Sagard Holdings Manager LP and to pay other costs related to the refinancing. The original maturity date of the term loan was May 3, 2022, later extended to March 22, 2023, and required the Company to make minimum principal payments amortized over 96 months.

During the year ended December 31, 2021, the Company made scheduled principal repayments totaling $1,031,250, a $5,000,000 voluntary principal prepayment, a prepayment premium of $125,000, further voluntary prepayments of $4,000,000 in 2021, and fully repaid the loan in July 2021 with a voluntary payment of $1,064,627 with cash primarily provided by the issuance of equity securities and warrant exercises. The prepayment premium is included in interest expense in the statement of operations.

The Company incurred $412,500 in original issue discount for closing related fees charged by the lender. During the year ended December 31, 2021 and 2020, the Company amortized $137,855 and $106,215, respectively, of the original issue discount into interest expense in the statement of operations. At December 31, 2021 the original issue discount was fully written off. The Company also incurred $1,831,989 in deferred debt issue costs related to the term loan. During the year ended December 31, 2021 and 2020, the Company amortized $713,119 and $549,446, respectively, of the deferred debt issue costs into interest expense in the statement of operations. At December 31, 2021 deferred debt issuance costs was fully written off.

The Company was also obligated to pay an exit fee of $1,072,500 to CrowdOut Capital by December 1, 2021. On November 1, 2021, the Company paid the exit fee in its entirety, which is reflected as interest expense in the Statement of Operations.

As of December 31, 2021, the Company had no senior debt obligations.

Paycheck Protection Program

In May 2020, of the Company received loans from Bank of America, NA totaling $346,390, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the Coronavirus Aid, Relief, and Economic Security Act, which was enacted on March 27, 2020.

The loans were to mature in May 2022, and bear interest at 1.00% per year, payable monthly commencing in November 2020. The Company used the proceeds for payroll, payroll taxes, and group healthcare benefits. Under the terms of the loan agreements, certain amounts of the loans may be forgiven if they are used for qualifying expenses, as described in the loan agreements.

The Company applied for forgiveness of the loans and was notified in March and May 2021 by the Small Business Administration that the repayment of the loans of $346,390 plus accrued interest of $2,786 had been forgiven. The income from forgiveness of both the loans and accrued interest is included in other income in the Company’s statement of operations for the year ended December 31, 2021.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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Stockholders' Equity Note [Abstract]

Stockholders' Equity

12 Months Ended

Dec. 31, 2021

STOCKHOLDERS’ EQUITY

NOTE 9 – STOCKHOLDERS’ EQUITY

October 2021 Reverse stock split

On October 15, 2021, the Company announced that the shareholders had approved a reverse split of its common stock and Series C Preferred at a ratio of 1 for 10. As a result of the reverse split, each 10 pre-split shares of common stock outstanding and each 10 pre-split shares of Series C Preferred stock outstanding were automatically exchanged for one new share of each without any action on the part of the holders. The number of outstanding common shares was reduced from approximately 88.3 million shares to approximately 8.8 million shares, and the number of outstanding Series C preferred shares was reduced from 2,000 shares to 200 shares. The reverse stock split did not affect the total number of shares of capital stock, including Series C Preferred Stock, that the company is authorized to issue.

Earnings per share and all share data for the year ended December 31, 2020 has been retroactively adjusted to reflect the reverse stock split in accordance with ASC 260-10-55-12, Restatement of EPS Data.

September 2021 Offering

On September 15, 2021, the Company sold an aggregate of (i) 2,788,750 shares of common stock, par value $0.0001 per share, and (ii) accompanying warrants to purchase up to an aggregate of 2,788,750 shares of Common Stock, at an exercise price of $4.95 per share, both of which include the underwriter’s full over-allotment option to purchase an additional 363,750 shares of common stock.

The shares and the warrants were offered and sold to the public pursuant to the Company’s registration statement on Form S-1, as amended (File No. 333-259105), filed by the Company with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”), which became effective on September 14, 2021.

The Warrants were not immediately exercisable, as the Company did not have a sufficient number of shares of Common Stock to reserve for issuance for the Warrants until the date (the “Initial Exercise Date”) that the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to affect a reverse stock split of the shares of Common Stock so that there were a sufficient number of shares of Common Stock for issuance upon exercise of the Warrants. The Warrants became exercisable on the Initial Exercise Date (the effective date of the reverse stock split) and will terminate five years after the Initial Exercise Date. The exercise price of the Warrants is subject to customary adjustments for stock dividends, stock splits and other subdivisions, combinations and re-classifications, and was reset on the date of the Company’s reverse stock split to the lower of (i) the closing price per share of the Common Stock immediately prior to the reverse stock split, giving effect to the reverse stock split and (ii) the exercise price then in effect. The Warrants are also exercisable on a cashless basis under certain circumstances, any time after the Initial Exercise Date, pursuant to the formula set forth in the Warrants. On October 15, 2021, after shareholder and Board approval of the reverse stock split, the exercise price for the Warrants was adjusted to $3.956 per share. The reverse stock split and exercise price was retroactively reported in accordance with ASC 260-10-55-12, Restatement of EPS Data.

On the Closing Date, the Company received gross proceeds of approximately $12.5 million, before deducting underwriting discounts and commissions and estimated Offering expenses. The Company intends to use the net proceeds from the Offering primarily for new product development, marketing, working capital and liability reduction purposes.

August 2021 Offering

On August 13, 2021, the Company entered into a securities purchase agreement with institutional accredited investors providing for an aggregate investment of $3,999,999 for the issuance by the Company of (i) 1,333,333 shares of Series F Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series F Preferred Stock”) convertible into shares of common stock, par value $0.0001 per share, of the Company that are issuable upon conversion of shares of Series F Preferred Stock; (ii) warrants, with a term of five and a half years exercisable after February 16, 2022, to purchase an aggregate of up to 666,667 shares of Common Stock at an exercise price of $7.80 per share. The securities issued to the investors were exempt from registration under the Securities Act of 1933, as amended, or the Securities Act, in reliance on Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder, based on representations made by the investors, their prior relationship with the Company, and the absence of any general solicitation. The Company used the net proceeds from this offering for working capital and liability reduction purposes. In the quarter ended September 30, 2021, 1,160,000 shares of Series F preferred stock were converted into 656,604 shares of common stock. On October 15, 2021, after shareholder and Board approval of the reverse stock split, the exercise price for the Warrants was adjusted to $4.95 per share, and was retroactively reported in accordance with ASC 260-10-55-12, Restatement of EPS Data.

February 2021 Offering

On February 2, 2021, the Company closed a registered direct offering and concurrent private placement pursuant to which the Company issued (i) an aggregate of 1,476,016 shares of Series E preferred stock, convertible into up to 295,203 shares of common stock, (ii) common stock purchase warrants to purchase up to 100,000 shares of common stock at an exercise price of $12.30 per share, which were exercisable immediately and had a term of five years, and (iii) common stock purchase warrants to purchase up to 195,203 shares of common stock at an exercise price of $12.30 per share with a term of five and one-half years first exercisable nine months after issuance, for gross proceeds of $4,000,003, before deducting any offering expenses. The Company used the net proceeds from this offering for working capital and liability reduction purposes. In February 2021, 1,476,016 shares of Series E preferred stock were converted into 295,203 shares of common stock. Also in February 2021 the Company recorded a deemed dividend of $1,480,801 from the beneficial conversion feature associated with the issuance of the Series E convertible preferred stock and warrants.

January 2021 Warrant exchange

On January 8, 2021, the Company entered into a Warrant Amendment and Exercise Agreement (the “Amendment”) with holders (the “Holder”) of a common stock purchase warrant, dated April 4, 2019, previously issued by the Company (the “Original Warrant”).

In consideration for each exercise of the Original Warrant within 45 calendar days of the Amendment, in addition to the issuance of the Warrant Shares, the Company agreed to deliver a new warrant to purchase shares of the Company’s common stock equal to the number of Original Warrants that the Holder exercised, at an exercise price of $15.25 per share, which represents the average Nasdaq Official Closing Price of the common stock for the five trading days immediately preceding the date of the Amendment (the “New Warrants”). The Investor held Original Warrants exercisable for up to 246,913 shares of common stock. In the first quarter of 2021, the Investor subsequently exercised all 246,913 Original Warrants within the 45 day period, and received 246,913 New Warrants in addition to the Warrant shares. The Company recorded a warrant modification expense of $2,881,729 for the three months ended March 31, 2021 resulting from the issuance of 246,913 replacement warrants with an exercise price of $1.525 for warrants that were exercised during the quarter.

December 2020 Offering

On December 18, 2020, the Company closed a registered direct offering and concurrent private placement pursuant to which the Company issued (i) an aggregate of 1,515,151 shares of Series D preferred stock, convertible into 303,030 shares of common stock, (ii) common stock purchase warrants to purchase up to 100,000 shares of common stock at an exercise price of $4.90 per share, which were exercisable immediately and had a term of five years, and (iii) common stock purchase warrants to purchase up to 505,060 shares of common stock at an exercise price of $4.90 per share with a term of five years and immediately exercisable, for gross proceeds of $2,000,000, before deducting offering expenses. The Company used the net proceeds from this offering for working capital, new product initiatives and other general corporate purposes. On December 21, 2020, all 1,515,151 shares of Series D preferred stock were converted into 303,030 shares of common stock. During the year ended December 31, 2020, the Company recorded a deemed dividend of $758,922 from the beneficial conversion feature associated with the issuance of the Series D convertible preferred stock and warrants.

July 2020 Offering

On July 14, 2020, the Company closed a registered direct offering and concurrent private placement of (i) an aggregate of 377,851 shares of the Company’s common stock, par value $0.0001 per share; (ii) pre-funded warrants to purchase up to 73,497 shares of Common Stock at an exercise price of $0.10 per share; (iii) registered warrants, with a term of five years exercisable immediately , to purchase up to 157,972 shares of Common Stock at an exercise price of $5.00 per share; and (iv) unregistered warrants, with a term of five and one-half years first exercisable six months after issuance, to purchase up to 375,000 shares of Common Stock at an exercise price of $6.50 per share, for gross proceeds of $1,864,528, before deducting offering expenses. The Company used the net proceeds from this Offering for working capital, new product initiatives and other general corporate purposes.

On July 28, 2020, the Company received proceeds of $7,350 in connection with the exercise of 73,497 pre-funded warrants to purchase common stock at an exercise price of $0.10 per share.

Series C Preferred Stock

In May 2017, the Company authorized Series C Preferred Stock. Holders of Series C Preferred Stock are entitled to receive dividends of 15% per year, payable in cash. For the years ended December 31, 2021 and 2020, the Company recorded Series C Preferred Stock dividends of $300,000 and $100,000 respectively. In addition, in 2021 the Company entered into a settlement agreement and paid $540,000 of dividends to settle a lawsuit filed by Giesecke+Devrient Mobile Security America, Inc over the calculation of prior dividends.

The Series C Preferred Stock may be redeemed by the Company at the Company’s option in cash at any time, in whole or in part, upon payment of the stated value of the Series C Preferred Stock and unpaid dividends. If a “fundamental change” occurs, the Series C Preferred Stock shall be immediately redeemed in cash equal to the stated value of the Series C Preferred Stock, and unpaid dividends. A fundamental change includes but is not limited to any change in the ownership of at least fifty percent of the voting stock; liquidation or dissolution; or the common stock ceases to be listed on the market upon which it currently trades.

The holders of the Series C Preferred Stock are entitled to vote on any matter submitted to the stockholders of the Company for a vote. One share of Series C Preferred Stock carries the same voting rights as one share of common stock.

A redeemable equity security is to be classified as temporary equity if it is conditionally redeemable upon the occurrence of an event that is not solely within the control of the issuer. Upon the determination that such events are probable, the equity security would be classified as a liability. Given the Series C Preferred Stock contains a fundamental change provision, the security is considered conditionally redeemable. Therefore, the Company has classified the Series C Preferred Stock as temporary equity in the balance sheets at December 31, 2021 and 2020 until such time that events occur that indicate otherwise.

Warrants

The following table summarizes the Company’s warrants outstanding and exercisable at December 31, 2021 and 2020:

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Outstanding at January 1, 2020		697,322		$	28.30		3.53		-
Issued		1,139,032			5.40		5.00		-
Exercised		(257,972	)		5.00		-		-
Cancelled		(9,375	)		401.00		-		-
Outstanding and Exercisable at December 31, 2020		1,569,007		$	13.30		4.10	$	10,850,158
Issued		3,897,534		$	5.26		4.77		-
Exercised		(1,002,307	)		9.07		-		-
Cancelled		(168,854	)		38.32		-		-
Outstanding and Exercisable at December 31, 2021		4,295,380		$	6.02		4.59		-

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Share-Based Payment Arrangement [Abstract]

Stock Incentive Plans

12 Months Ended

Dec. 31, 2021

STOCK INCENTIVE PLANS

NOTE 10 – STOCK INCENTIVE PLANS

2013 Long-Term Stock Incentive Plan

On January 4, 2013, the Company’s stockholders approved the Company’s Long-Term Stock Incentive Plan (“LTIP”). The maximum number of shares of common stock that may be issued under the LTIP, including stock awards, stock issued to the Company’s Board, and stock appreciation rights, is limited to 10% of the common shares outstanding on the first business day of any fiscal year.

During the year ended December 31, 2021, the Company issued a total of 36,467 stock options to four non-employee Board directors. The weighted average exercise price of these stock options was approximately $4.39 per share and the stock options were fully vested at the issuance date. The aggregate fair value of the shares issued to the directors was $160,000. During the year ended December 31, 2020, the Company issued a total of 33,527 options to four non-employee Board directors. The weighted average exercise price of these stock options was approximately $4.80 per share and the stock options were fully vested at the issuance date. The aggregate fair value of the shares issued to the directors was $160,000.

2017 Stock Incentive Plan

On August 24, 2017, the Company’s stockholders approved the 2017 Stock Incentive Plan (“2017 SIP”). The aggregate maximum number of shares of common stock that may be issued under the 2017 SIP is limited to 10% of the outstanding shares of common stock, calculated on the first business day of each fiscal year. Under the 2017 SIP, options which are forfeited or terminated, settled in cash in lieu of shares of common stock, or settled in a manner such that shares are not issued, will again immediately become available to be issued. If shares of common stock are withheld from payment of an award to satisfy tax obligations with respect to the award, those shares of common stock will be treated as shares that have been issued under the 2017 SIP and will not again be available for issuance.

During the year ended December 31, 2021, the Company issued 13,283 shares of common stock with an aggregate fair value of $80,456 to certain employees related to the Company’s 2019 and 2018 management incentive plan. During the year ended December 31, 2020, the Company issued 44,762 shares of common stock with an aggregate fair value of $200,794 to certain employees related to the Company’s 2019, 2018, and 2017 management incentive plan.

During the years ended December 31, 2021 and 2020, the Company accrued $285,000 and $200,000, respectively of management and employee bonus expense.

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 11– INCOME TAXES

For financial reporting purposes, income before income taxes includes the following components:

	Years Ended December 31,
	2021			2020
Loss before income taxes:
United States	$	(11,503,620	)	$	(2,840,098	)
Foreign		-			-
Loss before income taxes:	$	(11,503,620	)	$	(2,840,098	)

The expense (benefit) for income taxes consists of:

	December 31,
	2021		2020
Current income tax provision
Federal	-		-
State		9,007		24,886
Foreign		-		-
		9,007		24,886
Deferred income tax (benefit)
Federal		69,117		-
State		126,145		-
Foreign		-		-
		195,262		-

Total income tax provision (benefit)	$	204,269	$	24,886

Reconciliation between the ETR on income from continuing operations and the statutory tax rate is as follows:

	December 31,
	2021			2020
Provision at Federal statutory rate		21.00	%		21.00	%
State income taxes, net of state valuation allowance		-0.94	%		-2.63	%
Warrant modification expense		-5.26	%		0.00	%
Other permanent tax adjustments		.63	%		2.39	%
Change in Federal valuation allowance		-14.34	%		-21.64	%
Prior period adjustments		-2.86	%		0.00	%
Provision for income taxes		(1.77	)%		(0.88	)%

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, Management believes that significant uncertainty exists with respect to future realization of all of the deferred tax assets and has therefore established a full valuation allowance. The valuation allowance increased by $2.9 million for the year ended December 31, 2021, compared to the increase of $0.6 million for the year ended December 31, 2020.

The significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforward	$	12,268,170		$	10,290,985
Tax credits		205,028			205,028
Lease liabilities		71,309			68,596
Accruals and reserves		105,394			213,627
Capital loss carryforwards		2,678,907			2,619,921
Intangible assets		457,935			336,067
Stock compensation		227,190			-
Federal effect of state taxes		26,490			-
Other		9,145			2,836
Total deferred tax assets before valuation allowance:		16,049,568			13,737,060
Valuation allowance		(15,675,392	)		(12,744,883	)
Deferred tax assets, net of valuation allowance		374,176			992,177

Deferred tax liabilities:
Right-of-use assets		(69,736	)		(68,240	)
Taxable goodwill		(500,073	)		(923,937	)
Total deferred tax liabilities		(569,809	)		(992,177	)

Net deferred tax liability	$	(195,633	)		-

The net deferred tax liability as of December 31, 2021 and 2020 principally relates to our goodwill deferred tax liability, which has an indefinite reversal pattern. This deferred tax liability only partially serves as source of income for the realization of deferred tax assets with an indefinite loss carryforward period.

As of December 31, 2021, the Company had US federal and state net operating loss (“NOLs”) carryovers of $48,180,504 and $47,200,800 respectively before tax effect. Federal and state NOL’s generated through December 31, 2017 are available to offset future taxable income, which expire beginning in 2032. Federal NOL’s generated for years starting after December 31, 2017 are available to offset future taxable income indefinitely. State NOL’s generated for years starting after December 31, 2017 that are available to offset future taxable income indefinitely vary by state. The Company has Federal capital loss carryovers of $11,779,190 at December 31, 2021, which expire in 2024. The Company also has state capital loss carryovers of $3,966,439 at December 31, 2021, which begin to expire in 2024, and have no carryback period. In addition, the Company had tax credit carryforwards of $205,028 at December 31, 2021 that will be available to reduce future tax liabilities. The tax credit carryforwards will begin to expire beginning in 2032.

In accordance with Section 382 of the Internal Revenue Code, deductibility of the Company’s NOLs may be subject to an annual limitation in the event of a change of control. The Company has not determined whether a change of control has occurred as of December 31, 2021 with respect to the LogicMark NOLs and therefore no limitation under Section 382 has been computed. Management will review for such limitations before any of the LogicMark NOLs are utilized against future taxable income.

The Company has no material uncertain tax positions for any of the reporting periods presented. No interest or penalty expense was recorded during the year or has been accrued as of December 31, 2021 or 2020. The Company does not expect any material changes to any uncertain tax positions in the next twelve months. The Company has filed all of its tax returns for all prior periods through December 31, 2020 and intends to timely file the income tax returns for the period ending December 31, 2021.

The Company is subject to taxation in the United States and various states. As of December 31, 2021, the Company is not under examination by any taxing authority, however all of the Company’s U.S. and state income tax returns remain open to examination.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

COMMITMENTS AND CONTINGENCIES

NOTE 12 - COMMITMENTS AND CONTINGENCIES

LEGAL MATTERS

In connection with the sale of Fit-Pay, Inc., Giesecke+Devrient Mobile Security America, Inc. (“GDMSAI”) identified a disagreement with the Company over calculation of dividends with respect to GDMSAI’s Series C Non-Convertible Voting Preferred Stock (the “Series C”) of the Company and on August 13, 2020, GDMSAI sued the Company in Delaware Chancery Court seeking, among other things, $540,000 of dividends that it believes are owed to it pursuant to the terms of the Series C. In March 2021, a Delaware Chancery granted GDMSAI summary judgment on the merits, holding that relevant dividend language required a perpetually paid dividend once the $50 million threshold had been achieved. On August 11, 2021, the Company entered into a settlement agreement whereby the Company would pay $540,000 of dividends plus $55,000 of pre-judgement interest, but no post-judgement interest. The settlement was fully paid in the third and fourth quarter of 2021.

As previously disclosed, on February 24, 2020, Michael J. Orlando (“Orlando”), as purported shareholder representative (the “Shareholder Representative”), and other former stockholders of Fit Pay, Inc. (collectively, the “Plaintiffs”) filed a lawsuit in the United States District Court for the Southern District of New York against the Company, CrowdOut Capital, LLC (“CrowdOut”), and Garmin International, Inc. (“Garmin”). Plaintiff’s Second Amended Complaint, dated July 30, 2020 (the “Complaint”), alleges that the Company breached certain contractual obligations under a merger agreement, dated May 23, 2017, between Fit Pay, Inc. and the Company, regarding certain future, contingent earnout payments. The Complaint sought unspecified monetary damages from the defendants. In an Amended Answer and Counterclaim filed September 9, 2020, the Company denied all liability and sought, inter alia, damages caused by Orlando’s alleged wrongdoing. On October 15, 2020, the court authorized the Company to make a motion for summary judgment and stayed all discovery pending resolution of, among other things, that motion. On March 31, 2022, the court granted the Company’s motion of summary judgment and also dismissed the Company’s counterclaims, thus concluding the litigation.

From time to time, the Company may be involved in various claims and legal actions arising in the ordinary course of our business. Other than the above, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of the Company or any of our subsidiaries, threatened against or affecting our company, or any of our subsidiaries in which an adverse decision could have a material adverse effect upon our business, operating results, or financial condition.

COMMITMENTS

The Company leases office space and equipment, in the U.S., which is classified as operating leases expiring at various dates. The Company determines if an arrangement qualifies as a lease at the lease inception. Operating lease liabilities are recorded based on the present value of the future lease payments over the lease term, assessed as of the commencement date. The Company’s real estate lease, which is for office space and a fulfillment center, with a lease term of 5 years expiring in August 2025. The Company has elected to account for the lease and non-lease components (insurance and property taxes) as a single lease component for its real estate leases. Lease payments, which includes lease components and non-lease components, are included in the measurement of the Company’s lease liabilities to the extent that such payments are either fixed amounts or variable amounts based on a rate or index (fixed in substance) as stipulated in the lease contract. Any actual costs in excess of such amounts are expensed as incurred as variable lease cost.

The Company’s lease agreements generally do not specify an implicit borrowing rate, and as such, the Company uses its incremental borrowing rate to calculate the present value of the future lease payments. The discount rate represents a risk-adjusted rate on a secured basis and is the rate at which the Company would borrow funds to satisfy the scheduled lease liability payment streams. The Company entered into a new five-year lease agreement in June 2020 for new warehouse space located in Louisville, Kentucky. The monthly rent which commenced in September 2020 is $6,000 per month and increases approximately 3% annually thereafter. The ROU asset value added as a result of this new lease agreement was $279,024. The Company’s ROU asset and lease liability accounts reflect the inclusion of this lease in the Company’s balance sheet as of December 31, 2021.

The Company’s lease agreements include options for the Company to either renew or early terminate the lease. Renewal options are reviewed at lease commencement to determine if such options are reasonably certain of being exercised, which could impact the lease term. When determining if a renewal option is reasonably certain of being exercised, the Company considers several factors, including significance of leasehold improvements on the property, whether the asset is difficult to replace, or specific characteristics unique to the lease that would make it reasonably certain that the Company would exercise the option. In most cases, the Company has concluded that renewal and early termination options are not reasonably certain of being exercised by the Company and thus not included in the Company’s ROU asset and lease liability.

For the year ended December 31, 2021, total operating lease cost was $90,986 and is recorded in cost of sales and selling, general and administrative expenses, dependent on the nature of the leased asset. The operating lease cost is recognized on a straight-line basis over the lease term. The following summarizes (i) the future minimum undiscounted lease payments under the non-cancelable lease for each of the next four years and thereafter, incorporating the practical expedient to account for lease and non-lease components as a single lease component for our existing real estate lease, (ii) a reconciliation of the undiscounted lease payments to the present value of the lease liabilities, and (iii) the lease-related account balances on the Company’s balance sheet as of December 31, 2021:

Year Ending December 31,

2022	$	93,385
2023		89,724
2024		80,000
2025		54,400
Total future minimum lease payments	$	317,509
Less imputed interest		(63,600	)
Total present value of future minimum lease payments	$	253,909

As of December 31, 2021
Operating lease right-of-use assets	$	253,909

Other accrued expenses	$	64,346
Other long-term liabilities	$	189,563
	$	253,909

As of December 31, 2021

Weighted Average Remaining Lease Term		3.3 years
Weighted Average Discount Rate		12.80	%

Coronavirus – COVID-19

The COVID-19 coronavirus has caused governments to implement quarantines and restrictions on travel and has caused business interruptions and a worldwide pandemic. The Company’s primary supply chain is located in Hong Kong and other Asian-based locations. To date, the Company’s supply chain has not experienced significant disruptions, as the Company has been able to manage supply chain issues. However, the pandemic has impacted the Company’s primary customers, large hospitals and smaller clinics. The smaller clinics in particular have been focused on saving lives rather than quality of life during the pandemic, therefore needing less of the Company’s products. While the Company expects this matter to negatively impact the Company’s financial condition, results of operations, or cash flows, the extent of the financial impact and duration cannot be reasonably estimated at this time.

Subsequent Events

12 Months Ended

Dec. 31, 2021

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 13 - SUBSEQUENT EVENTS

Effective February 15, 2022, the Company’s board of directors appointed Mark Archer as the Company’s Chief Financial Officer. In connection with the appointment, the Company and FLG Partners, LLC (“FLG Partners”), of which Mr. Archer is a partner, entered into an amendment, effective as of July 15, 2021 (the “Amendment”), pursuant to which the Company agreed to amend the fee payable to FLG Partners to $10,000 per week, to permit Mr. Archer to separately invoice the Company $2,000 per month, payable to Mr. Archer only and to issue 129,384 restricted shares of Common Stock to Mr. Archer and 6,810 to FLG Partners; a quarter of each issuance will vest on July 15, 2022, with subsequent vesting at 6.25% for each three-month period thereafter.

On February 21, 2022, the Company’s board of directors appointed Sherice R. Torres as a director and on March 15, 2022, the Company’s board of directors appointed John Pettitt as a director, increasing board membership to seven.

Accounting Policies, by Policy (Policies)	12 Months Ended
Accounting Policies, by Policy (Policies)	Dec. 31, 2021
Accounting Policies [Abstract]
USE OF ESTIMATES IN THE FINANCIAL STATEMENTS	*USE OF ESTIMATES IN THE FINANCIAL STATEMENTS* The preparation of financial statements in conformity with generally accepted accounting principles in the United States (“U.S. GAAP”) 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 financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management evaluates these significant estimates and assumptions, including those related to the fair value of acquired assets and liabilities, stock-based compensation, income taxes, allowance for doubtful accounts, long-lived assets, and inventories, and other matters that affect the financial statements and disclosures. Actual results could differ from those estimates.
CASH	*CASH* The Company considers all highly liquid securities with an original maturity date of three months or less when purchased to be cash equivalents. Due to their short-term nature, cash equivalents are carried at cost, which approximates fair value. At December 31, 2021 and 2020, the Company had no cash equivalents.
RESTRICTED CASH	*RESTRICTED CASH* At December 31, 2021 and 2020, the Company had restricted cash of $210,131 and $150,130, respectively. Restricted cash includes amounts held back by the Company’s third-party credit card processor for potential customer refunds, claims and disputes and held as collateral for company credit cards. Cash and restricted cash, as presented on the statements of cash flows, consists of $12,044,415 and $210,131 as of December 31, 2021, respectively, and $4,387,416 and $150,130 as of December 31, 2020.
CONCENTRATIONS OF CREDIT RISK	*CONCENTRATIONS OF CREDIT RISK* Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash. The Company maintains its cash balances in large well-established financial institutions located in the United States. At times, the Company’s cash balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.
REVENUE RECOGNITION	*REVENUE RECOGNITION* The Company’s revenues consist of product sales to either end customers or to distributors. The Company’s revenues are derived from contracts with customers, which are in most cases customer purchase orders. For each contract, the promise to transfer the control of the products, each of which is individually distinct, is considered to be the identified performance obligation. As part of the consideration promised in each contract, the Company evaluates the customer’s credit risk. Our contracts do not have any financing components, as payment terms are generally due net 30 days after the invoice date. The Company’s products are almost always sold at fixed prices. In determining the transaction price, we evaluate whether the price is subject to any refunds, due to product returns or adjustments due to volume discounts, rebates or price concessions to determine the net consideration we expect to be entitled to. The Company’s sales are recognized at a point-in-time under the core principle of recognizing revenue when control transfers to the customer, which generally occurs when the Company ships or delivers the product from its fulfillment center to our customers, when our customer accepts and has legal title of the goods, and the Company has a present right to payment for such goods. Based on the respective contract terms, most of our contracts revenues are recognized either (i) upon shipment based on free on board (“FOB”) shipping point, or (ii) when the product arrives at its destination. For the years ended December 31, 2021 and 2020, none of our sales were recognized over time.
SALES TO DISTRIBUTORS AND RESELLERS	*SALES TO DISTRIBUTORS AND RESELLERS* Sales to certain distributors and resellers are made under terms allowing limited rights of return of the Company’s products held in their inventory or upon sale to their end customers. The Company maintains a reserve for unprocessed and estimated future price adjustments claims and returns as a refund liability. The reserve is recorded as a reduction to revenue in the same period that the related revenue is recorded and is calculated based on an analysis of historical claims and returns over a period of time to appropriately account for current pricing and business trends. Similarly, sales returns and allowances are recorded based on historical return rates, as a reduction to revenue with a corresponding reduction to cost of sales for the estimated cost of inventory that is expected to be returned. These reserves were not material upon the adoption of Topic 606 on January 1, 2018, nor were they material in the balance sheet at December 31, 2021 and 2020.
SHIPPING AND HANDLING	*SHIPPING AND HANDLING* Amounts billed to customers for shipping and handling are included in revenues. The related freight charges incurred by the Company are included in cost of goods sold and were $492,566 and $524,481, respectively, for the years ended December 31, 2021 and 2020.
ACCOUNTS RECEIVABLE	*ACCOUNTS RECEIVABLE* For the years ended December 31, 2021 and 2020, the Company’s revenues primarily included shipments of the LogicMark products. The terms and conditions of these sales provide certain customers with trade credit terms. In addition, these sales were made to the retailers with no rights of return and are subject to the normal warranties offered to the ultimate consumer for product defects. Accounts receivable is stated at net realizable value. The Company regularly reviews accounts receivable balances and adjusts the receivable reserves as necessary whenever events or circumstances indicate the carrying value may not be recoverable. At December 31, 2021 and 2020, the Company had an allowance for doubtful accounts of $5,411 and $126,733, respectively.
INVENTORY	*INVENTORY* The Company measures inventory at the lower of cost or net realizable value, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The Company performs regular reviews of inventory quantities on hand and evaluates the realizable value of its inventories. The Company adjusts the carrying value of the inventory as necessary with estimated valuation reserves for excess, obsolete, and slow-moving inventory by comparing the individual inventory parts to forecasted product demand or production requirements. The inventory is valued at the lower of cost or net realizable value with cost determined using the first-in, first-out method. As of December 31, 2021, inventory was comprised of $1,237,280 in finished goods on hand. In addition, during 2021 we wrote down inventory totaling $314,000. As of December 31, 2020 inventory was comprised of $199,523 in raw materials and $567,828 in finished goods on hand. The Company is required to prepay for certain inventory with certain vendors until credit terms can be established. As of December 31, 2021 and 2020, $559,938 and $332,475 respectively, of prepayments made for inventory is included in prepaid expenses and other current assets on the balance sheet.
LONG-LIVED ASSETS	*LONG-LIVED ASSETS* Long-lived assets, such as property and equipment, and other intangibles are evaluated for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. When indicators exist, the Company tests for the impairment of the definite-lived assets based on the undiscounted future cash flow the assets are expected to generate over their remaining useful lives, compared to the carrying value of the assets. If the carrying amount of the assets is determined not to be recoverable, a write-down to fair value is recorded. Management estimates future cash flows using assumptions about expected future operating performance. Management’s estimates of future cash flows may differ from actual cash flow due to, among other things, technological changes, economic conditions or changes to the Company’s business operations.
PROPERTY AND EQUIPMENT	*PROPERTY AND EQUIPMENT* Property and equipment consisting of furniture, fixtures and tooling is stated at cost. The costs of additions and improvements are generally capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items of property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in income. Depreciation of property and equipment is provided utilizing the straight-line method over the estimated useful life of the respective asset as follows:
GOODWILL	*GOODWILL* Goodwill is reviewed annually in the fourth quarter, or when circumstances indicate that an impairment may have occurred. The Company first performs a qualitative assessment of goodwill impairment, which considers factors such as market conditions, performance compared to forecast, business outlook and unusual events. If the qualitative assessment indicates a possible goodwill impairment, goodwill is then quantitatively tested for impairment. The Company may elect to bypass the qualitative assessment and proceed directly to the quantitative test. If a quantitative goodwill impairment test is required, the fair value is determined using a variety of assumptions including estimated future cash flows using applicable discount rates (income approach) and comparisons to other similar companies (market approach). As part of the annual evaluation of goodwill in 2021, the Company determined that it is more likely than not that the carrying value of goodwill exceeded its fair value, and therefore an impairment write-down was required. During the year ended December 31, 2021, the Company wrote down the carrying value of goodwill by $4,521,000. See Note 5.
OTHER INTANGIBLE ASSETS	*OTHER INTANGIBLE ASSETS* The Company’s intangible assets are related to the acquisition of LogicMark and are included in other intangible assets in the Company’s balance sheet at December 31, 2021 and 2020. At December 31, 2021, the other intangible assets are comprised of patents of $2,072,984; trademarks of $915,619; and customer relationships of $1,488,044. At December 31, 2020, the other intangible assets are comprised of patents of $2,445,709; trademarks of $978,494; and customer relationships of $1,814,259. The Company amortizes these intangible assets using the straight-line method over their estimated useful lives which for the patents, trademarks and customer relationships are 11 years, 20 years, and 10 years, respectively. During the years ended December 31, 2021 and 2020, the Company had amortization expense of $761,815 each year. Amortization expense estimated for each of the next five fiscal years, 2022 through 2026, is expected to be approximately $762,000 per year for the first four years, $619,000 for the fifth year, and fully amortized in 2036.
CONVERTIBLE INSTRUMENTS	*CONVERTIBLE INSTRUMENTS* The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The accounting standards require companies to separate conversion options from their host instruments and account for them as free-standing derivatives according to certain criteria. The criteria include circumstances in which (i) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract, (ii) the hybrid instrument that embodies both the embedded derivative and the host contract is not re-measured at fair value under generally accepted accounting principles with changes in fair value reported in earnings as they occur and (iii) a separate instrument with the same terms as the embedded derivative would be considered a derivative. The derivative is subsequently marked to market at each reporting date based on current fair value, with the changes in fair value reported in the results of operations. Conversion options with variable settlement features such as provisions to adjust the conversion price upon subsequent issuances of at exercise prices more favorable than that in the hybrid contract generally result in their separation from the host instrument. 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. The debt discounts under these arrangements are amortized over the earlier of (i) the term of the related debt using the straight-line method which approximates the interest rate method or (ii) conversion of the debt. The amortization of debt discount is included as interest expense included in other income and expenses in the statements of operations.
DERIVATIVE FINANCIAL INSTRUMENTS	*DERIVATIVE FINANCIAL INSTRUMENTS* The Company does not use derivatives to hedge exposures to cash flow, market or foreign currency risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. Derivative financial instruments accounted for as liabilities are initially recorded at fair value and then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. For stock-based derivatives, the Company uses the Black-Scholes or binomial option valuation model to value the derivatives at inception and on subsequent valuation dates. The Company accounts for conversion features that are embedded within the Company’s convertible notes payable that do not have fixed settlement provisions as a separate derivative. In addition, warrants issued by the Company that do not have fixed settlement provisions are also treated as derivatives. The classification of derivatives, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative could be required within 12 months of the balance sheet date.
INCOME TAXES	*INCOME TAXES* The Company uses the asset and liability method of accounting for income taxes. Income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company will classify as income tax expense any interest and penalties. The Company has no material uncertain tax positions for any of the reporting periods presented. Generally, the tax authorities may examine tax returns for three years from the date of filing. The Company has filed all of its tax returns for all prior periods through December 31, 2020.
STOCK-BASED COMPENSATION	*STOCK-BASED COMPENSATION* The Company accounts for share-based awards exchanged for employee services at the estimated grant date fair value of the award. The Company accounts for equity instruments issued to non-employees at their fair value on the measurement date. The measurement of stock-based compensation is subject to periodic adjustment as the underlying equity instrument vests or becomes non-forfeitable. Stock-based compensation charges are amortized over the vesting period or as earned. Stock-based compensation is recorded in the same component of operating expenses as if it were paid in cash. The Company generally issues new shares of common stock to satisfy conversion and warrant exercises.
NET LOSS PER SHARE	*NET LOSS PER SHARE* Basic loss per share was computed using the weighted average number of common shares outstanding. Diluted loss per share includes the effect of diluted common stock equivalents. Potentially dilutive securities from the exercise of stock options to purchase 36,467 shares of common stock and warrants to purchase 4,295,380 shares of common stock as of December 31, 2021 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive. Potentially dilutive securities from the exercise of stock options to purchase 33,527 shares of common stock and warrants to purchase 1,569,007 shares of common stock as of December 31, 2020 were excluded from the computation of diluted net loss per share because the effect of their inclusion would have been anti-dilutive.
RESEARCH AND DEVELOPMENT	*RESEARCH AND DEVELOPMENT* Research and development costs consist of expenditures incurred during the course of planned research and investigation aimed at the discovery of new knowledge, which will be useful in developing new products or processes. The Company expenses all research and development costs as incurred.
RECENT ACCOUNTING PRONOUNCEMENTS	*RECENT ACCOUNTING PRONOUNCEMENTS* Recent accounting standards that have been issued or proposed by FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on the Company’s financial statements upon adoption.

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of estimated useful life of property and equipment

Equipment	5 years
Furniture and fixtures	3 to 5 years
Tooling and molds	2 to 3 years

Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

Schedule of accrued expenses

	December 31,
	2021		2020
Salaries, payroll taxes and vacation	$	54,229	$	130,093
Consulting fees		-		-
Merchant bank fees		17,853		19,754
State income taxes		0		38,672
Professional fees		104,500		226,794
Management incentives		285,000		500,419
Interest expense		-		128,187
Lease liability		64,346		54,476
Dividends – Series C and F Preferred Stock		94,933		25,000
Other		228,424		191,865
Totals	$	849,285	$	1,315,260

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2021

Stockholders' Equity Note [Abstract]

Schedule of warrants outstanding and exercisable

						Weighted
				Weighted		Average
				Average		Remaining		Aggregate
	Number of			Exercise		Life		Intrinsic
	Warrants			Price		In Years		Value
Outstanding at January 1, 2020		697,322		$	28.30		3.53		-
Issued		1,139,032			5.40		5.00		-
Exercised		(257,972	)		5.00		-		-
Cancelled		(9,375	)		401.00		-		-
Outstanding and Exercisable at December 31, 2020		1,569,007		$	13.30		4.10	$	10,850,158
Issued		3,897,534		$	5.26		4.77		-
Exercised		(1,002,307	)		9.07		-		-
Cancelled		(168,854	)		38.32		-		-
Outstanding and Exercisable at December 31, 2021		4,295,380		$	6.02		4.59		-

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of income before income taxes

	Years Ended December 31,
	2021			2020
Loss before income taxes:
United States	$	(11,503,620	)	$	(2,840,098	)
Foreign		-			-
Loss before income taxes:	$	(11,503,620	)	$	(2,840,098	)

Schedule of income tax (benefit) provision

	December 31,
	2021		2020
Current income tax provision
Federal	-		-
State		9,007		24,886
Foreign		-		-
		9,007		24,886
Deferred income tax (benefit)
Federal		69,117		-
State		126,145		-
Foreign		-		-
		195,262		-

Total income tax provision (benefit)	$	204,269	$	24,886

Schedule of reconciliation of effective income tax rate and statutory federal income tax rate

	December 31,
	2021			2020
Provision at Federal statutory rate		21.00	%		21.00	%
State income taxes, net of state valuation allowance		-0.94	%		-2.63	%
Warrant modification expense		-5.26	%		0.00	%
Other permanent tax adjustments		.63	%		2.39	%
Change in Federal valuation allowance		-14.34	%		-21.64	%
Prior period adjustments		-2.86	%		0.00	%
Provision for income taxes		(1.77	)%		(0.88	)%

Schedule of deferred tax assets and liabilities

	December 31,
	2021			2020
Deferred tax assets:
Net operating loss carryforward	$	12,268,170		$	10,290,985
Tax credits		205,028			205,028
Lease liabilities		71,309			68,596
Accruals and reserves		105,394			213,627
Capital loss carryforwards		2,678,907			2,619,921
Intangible assets		457,935			336,067
Stock compensation		227,190			-
Federal effect of state taxes		26,490			-
Other		9,145			2,836
Total deferred tax assets before valuation allowance:		16,049,568			13,737,060
Valuation allowance		(15,675,392	)		(12,744,883	)
Deferred tax assets, net of valuation allowance		374,176			992,177

Deferred tax liabilities:
Right-of-use assets		(69,736	)		(68,240	)
Taxable goodwill		(500,073	)		(923,937	)
Total deferred tax liabilities		(569,809	)		(992,177	)

Net deferred tax liability	$	(195,633	)		-

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of future lease obligation

Year Ending December 31,

2022	$	93,385
2023		89,724
2024		80,000
2025		54,400
Total future minimum lease payments	$	317,509
Less imputed interest		(63,600	)
Total present value of future minimum lease payments	$	253,909

Schedule of lease expense

As of December 31, 2021
Operating lease right-of-use assets	$	253,909

Other accrued expenses	$	64,346
Other long-term liabilities	$	189,563
	$	253,909

As of December 31, 2021

Weighted Average Remaining Lease Term		3.3 years
Weighted Average Discount Rate		12.80	%

Liquidity and Management Plans (Details) - USD ($)	12 Months Ended
Liquidity and Management Plans (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating income from continuing operations	$ (7,547,456)	$ (586,078)
Net loss from continuing operations	(11,707,889)
Cash	12,044,415	4,387,416
Stockholders' equity	26,589,171	$ 9,159,211	$ 6,714,589
Working capital	13,098,049
Working capital	578,795
Net proceeds exercise of common stock warrants	$ 26,669,788

Amount after tax of income (loss) from continuing operations attributable to the parent.

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Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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