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INVESTMENTS IN EQUITY SECURITIES | 12 Months Ended
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Dec. 31, 2024
Schedule of Investments [Abstract] |
INVESTMENTS IN EQUITY SECURITIES | NOTE 6 – INVESTMENTS IN EQUITY SECURITIES The Company’s equity investments consist of nonmarketable equity securities in privately held companies without readily determinable fair values. Unless accounted for under the equity method of accounting, the investments are reported at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. DirectDerm In July 2020, the Company made a $500,000 long-term investment to purchase certain nonmarketable securities consisting of 7,142,857 Series B-2 Preferred Shares of Direct Dermatology Inc. (“DirectDerm”), representing approximately 2.9% ownership of DirectDerm at that time. Through this investment, the Company received exclusive rights to utilize DirectDerm’s technology in all acute and post-acute care settings such as skilled nursing facilities, home health and wound clinics. In 2021, the Company purchased an additional 3,571,430 shares of DirectDerm’s Series B-2 Preferred for $250,000. In March 2022, the Company purchased an additional 3,571,429 shares of DirectDerm’s Series B-2 Preferred for $250,000. The Company’s ownership of DirectDerm was approximately 8.1% as of December 31, 2024. The Company does not have the ability to exercise significant influence over DirectDerm’s operating and financial activities. In accordance with ASC Topic 321, Investments - Equity Securities (“ASC 321”), this investment was reported at cost as of December 31, 2024. Pixalere In June 2021, the Company invested $2,084,278 to purchase 278,587 Class A Preferred Shares (the “Pixalere Shares”) of Canada based Pixalere Healthcare Inc. (“Pixalere”). The Pixalere Shares are convertible into approximately 27.3% of the outstanding equity of Pixalere. Pixalere provides a cloud-based wound care software tool that empowers nurses, specialists and administrators to deliver better care for patients. In connection with the Company’s purchase of the Pixalere Shares, Pixalere granted Pixalere Healthcare USA, LLC (“Pixalere USA”), a subsidiary of the Company, a royalty-free exclusive license to use the Pixalere software and platform in the United States. In conjunction with the grant of the license, the Company issued Pixalere a 27.3% equity ownership interest in Pixalere USA valued at $93,879. The Company reviewed the characteristics of the Pixalere Shares in accordance with ASC Topic 323, Investments – Equity Method and Joint Ventures (“ASC 323”). Due to the substantive liquidation preferences of the Pixalere Shares over Pixalere’s common stock, the Pixalere Shares are not “in-substance” common stock, and therefore, the Company does not utilize the equity method of accounting for this investment. In accordance with ASC 321, this investment was reported at cost as of December 31, 2024. ChemoMouthpiece In September 2024, the Company, through its wholly owned subsidiary, Sanara CMP LLC (“Sanara CMP”), entered into a Unit Purchase Agreement (the “Unit Purchase Agreement”) with ChemoMouthpiece, LLC (“CMp”), pursuant to which Sanara CMP purchased 100,674.72 common units in CMp for an aggregate purchase price of $5.0 million, or $49.6649 per unit, which represented approximately 6.64% of the issued and outstanding membership interest of CMp immediately following such purchase. Subsequent to the Company’s initial investment in CMp, units of CMp were sold to other investors, thereby decreasing the Company’s ownership of CMp to 6.59% as of December 31, 2024. CMp is a privately held medical device company that develops and commercializes propriety oral cryotherapy products for cancer patients, including, among other things, CMp’s Chemo Mouthpiece oral cryotherapy device, which is a 510(k) cleared cryotherapy device designed to reduce the incidence and severity of chemotherapy induced oral mucositis. The Company has reviewed the characteristics of Sanara CMP’s investment in CMp in accordance with ASC 323 and determined that Sanara CMP made a non-controlling investment in a limited liability company. According to the guidance provided in ASC 323-30-S99-1, investments in limited liability companies whereby an investor holds more than a 3% to 5% ownership interest would generally be accounted for under the equity method of accounting. Therefore, the Company utilized the equity method of accounting for this investment and recorded its initial investment at cost plus transaction costs. Sanara CMP’s share of the earnings or losses of CMp is recorded in the Company’s Consolidated Statements of Operations. SI Technologies In November 2022, the Company established a 50/50 joint venture, SI Healthcare Technologies, LLC (“SI Technologies”) (formerly known as SI Wound Care, LLC), with InfuSystem Holdings, Inc. (“InfuSystem”). In connection with the Unit Purchase Agreement with CMp, the Company, CMp, certain subsidiaries of CMp, InfuSystem and SI Technologies, entered into an Exclusive Distribution Agreement (the “Distribution Agreement”) pursuant to which SI Technologies was appointed as the sole and exclusive U.S. distributor of CMp’s Standard Chemo Regiment Kits. The parties to the Distribution Agreement also entered into an Intellectual Property Rights Agreement, pursuant to which SI Technologies was granted the exclusive right to use CMp’s intellectual property rights to permit resale and use of the CMp Product in the United States. The Company has reviewed the characteristics the Company’s investment in SI Technologies in accordance with ASC 323 and determined that the Company made a non-controlling investment in a limited liability company. According to the guidance provided in ASC 323-30-S99-1, investments in limited liability companies whereby an investor holds more than a 3% to 5% ownership interest would generally be accounted for under the equity method of accounting. Therefore, the Company utilized the equity method of accounting for this investment and recorded its initial investment at cost. The Company’s share of the earnings or losses of SI Technologies is recorded in the Company’s Consolidated Statements of Operations. The following table summarizes the Company’s investments for the periods presented: SCHEDULE OF INVESTMENTS
|  | December 31, 2024 |  |  | December 31, 2023 |
|  | Carrying Amount |  |  | Economic Interest |  |  | Carrying Amount |  |  | Economic Interest |
Equity Method Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ChemoMouthpiece, LLC |  | $ | 5,172,242 |  |  |  | 6.59 | % |  | $ | - |  |  |  | - | %
SI Healthcare Technologies, LLC |  |  | 40,703 |  |  |  | 50.00 | % |  |  | - |  |  |  | - | %
Total Equity Method Investments |  | $ | 5,212,945 |  |  |  |  |  |  | $ | - |  |  |  |  |
Cost Method Investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct Dermatology, Inc. |  | $ | 1,000,000 |  |  |  |  |  |  | $ | 1,000,000 |  |  |  |  |
Pixalere Healthcare Inc. |  |  | 2,084,278 |  |  |  |  |  |  |  | 2,084,278 |  |  |  |  |
Total Cost Method Investments |  | $ | 3,084,278 |  |  |  |  |  |  | $ | 3,084,278 |  |  |  |  |
Total Investments |  | $ | 8,297,223 |  |  |  |  |  |  | $ | 3,084,278 |  |  |  |  |
The following table summarizes the Company’s share of losses from equity method investments reflected in the Company’s Consolidated Statements of Operations for the periods presented: SCHEDULE OF LOSS FROM EQUITY METHOD INVESTMENT
|  | 2024 |  |  | 2023 |
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Investments |  |  |  |  |  |  |  |
ChemoMouthpiece, LLC |  | $ | (105,710 | ) |  | $ | - |
SI Healthcare Technologies, LLC |  |  | 15,703 |  |  |  | - |
Total |  | $ | (90,007 | ) |  | $ | - |
Loss from equity method investment |  | $ | (90,007 | ) |  | $ | - |

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