Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Helios & Matheson Analytics Inc. | |
Entity Central Index Key | 1,040,792 | |
Trading Symbol | HMNY | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 82,655,182 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 42,520,518 | $ 24,949,393 |
Accounts receivable - less allowance for doubtful accounts of $75,336 and $72,335 at March 31, 2018 and December 31, 2017, respectively | 24,432,216 | 27,470,219 |
Prepaid expenses and other current assets | 3,267,327 | 3,557,811 |
Total current assets | 70,220,061 | 55,977,423 |
Property and equipment, net of accumulated depreciation of $290,004 and $274,587 at March 31, 2018 and December 31, 2017, respectively | 310,727 | 234,035 |
Intangible assets, net | 27,279,711 | 28,536,782 |
Goodwill | 79,137,177 | 79,137,177 |
Deposits and other assets | 147,046 | 147,171 |
Total assets | 177,094,722 | 164,032,588 |
Current liabilities: | ||
Accounts payable and accrued expenses | 13,328,090 | 13,144,003 |
Deferred revenue | 84,887,136 | 54,425,630 |
Liabilities to be settled in stock | 10,276,266 | 21,320,705 |
Convertible notes payable, net of debt discount of $0 and $2,444,368, respectively | 2,061,072 | |
Warrant liability | 70,030,200 | 67,288,800 |
Derivative liability | 699,900 | 4,834,462 |
Total current liabilities | 179,221,592 | 163,074,672 |
Convertible notes payable, net of current portion and debt discount of $54,064 and $1,392,514, respectively | 641,206 | 1,550,555 |
Total liabilities | 179,862,798 | 164,625,227 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, $0.01 par value; 2,000,000 shares authorized; no shares issued and outstanding as of March 31, 2018 and December 31, 2017 | ||
Common stock, $0.01 par value; 500,000,000 shares authorized; 49,613,144 issued and outstanding as of March 31, 2018; 100,000,000 shares authorized; 23,981,253 issued and outstanding as of December 31, 2017 | 496,131 | 239,813 |
Paid-in capital | 180,415,969 | 150,356,757 |
Accumulated other comprehensive loss - foreign currency translation | (111,130) | (103,980) |
Accumulated deficit | (184,319,310) | (189,495,185) |
Noncontrolling interest | 750,264 | 38,409,956 |
Total stockholders' deficit | (2,768,076) | (592,639) |
Total liabilities and stockholders' deficit | $ 177,094,722 | $ 164,032,588 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 75,336 | $ 72,335 |
Property and equipment, net of depreciation | 290,004 | 274,587 |
Convertible notes payable, debt discount - current | 0 | 2,444,368 |
Convertible notes payable, debt discount - long term | $ 54,064 | $ 1,392,514 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 100,000,000 |
Common stock, shares issued | 49,613,144 | 23,981,253 |
Common stock, shares outstanding | 49,613,144 | 23,981,253 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues: | ||
Consulting | $ 839,503 | $ 1,358,062 |
Subscription | 47,162,447 | |
Marketing and promotional services | 1,440,910 | |
Total revenues | 49,442,860 | 1,358,062 |
Cost of revenue | 135,968,976 | 1,105,485 |
Gross (loss) profit | (86,526,116) | 252,577 |
Operating expenses: | ||
Selling, general & administrative | 19,709,831 | 4,180,172 |
Research and development | 224,771 | |
Depreciation and amortization | 1,271,275 | 430,925 |
Total operating expenses | 21,205,877 | 4,611,097 |
Loss from operations | (107,731,993) | (4,358,520) |
Other income / (expense): | ||
Change in fair market value - derivative liabilities | 8,597,378 | 867,468 |
Change in fair market value - warrant liabilities | 93,608,200 | 114,863 |
Gain on extinguishment of debt | 15,007,699 | |
Interest expense | (35,534,899) | (3,108,832) |
Interest income | 15,341 | 17,950 |
Total other income/(expense) | 81,693,719 | (2,108,551) |
Loss before income taxes | (26,038,274) | (6,467,071) |
Provision for income taxes | 7,951 | 30,484 |
Net loss | (26,046,225) | (6,497,555) |
Net loss attributable to the noncontrolling interest | 31,222,100 | |
Net income/(loss) attributable to Helios and Matheson Analytics Inc. | 5,175,875 | (6,497,555) |
Other comprehensive (loss)/income - foreign currency adjustment | (7,150) | 823 |
Comprehensive income/(loss) | $ 5,168,725 | $ (6,496,732) |
Basic income (loss) per share: | ||
Net income (loss) per share attributable to common stockholders - basic | $ 0.15 | $ (1.17) |
Weighted average shares - basic | 34,850,281 | 5,530,083 |
Diluted income (loss) per share: | ||
Net income (loss) per share attributable to common stockholders - diluted | $ 0.09 | $ (1.17) |
Weighted average shares - diluted | 36,602,367 | 5,530,083 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($) | Total | Common Stock | Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Non-controlling Interest |
Balance at Dec. 31, 2017 | $ (592,639) | $ 239,813 | $ 150,356,757 | $ (103,980) | $ (189,495,185) | $ 38,409,956 |
Balance, shares at Dec. 31, 2017 | 23,981,253 | |||||
Settlement of warrant liability | 12,894,165 | $ 43,536 | 12,850,629 | |||
Settlement of warrant liability, shares | 4,353,581 | |||||
Warrant liability which ceases to exist | 50,307,400 | 50,307,400 | ||||
Conversion of convertible notes and interest | 4,677,899 | $ 11,694 | 4,666,205 | |||
Conversion of convertible notes and interest, shares | 1,169,475 | |||||
Shares issued for settlement of a liability | 11,066,605 | $ 12,022 | 11,054,583 | |||
Shares issued for settlement of a liability, shares | 1,202,167 | |||||
MoviePass shares issued in advance of services | 324,369 | 324,369 | ||||
Share based compensation | 4,913,227 | $ 6,316 | 4,906,911 | |||
Share based compensation, shares | 631,668 | |||||
Derivative liability which ceases to exist | 1,734,940 | 1,734,940 | ||||
Shares/warrants issued for February public offering | 96,904,131 | $ 182,750 | 96,721,381 | |||
Shares/warrants issued for February public offering, shares | 18,275,000 | |||||
Reclassification of warrants from February public offering to derivative liability | (158,944,798) | (158,944,798) | ||||
Adjustment of non-controlling interest in connection with the MoviePass Acquisition | 6,437,592 | (6,437,592) | ||||
Net income | (26,046,225) | 5,175,875 | (31,222,100) | |||
Foreign exchange translation | (7,150) | (7,150) | ||||
Balance at Mar. 31, 2018 | $ (2,768,076) | $ 496,131 | $ 180,415,969 | $ (111,130) | $ (184,319,310) | $ 750,264 |
Balance, shares at Mar. 31, 2018 | 49,613,144 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (26,046,225) | $ (6,497,555) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,271,275 | 430,925 |
Change in fair market value - derivative liabilities | (8,597,378) | (867,468) |
Change in fair market value - warrant liabilities | (93,608,200) | (114,863) |
Gain on extinguishment of debt | (15,007,699) | |
Provision for doubtful accounts | 3,001 | (4,055) |
Non-cash interest expense | 34,969,982 | 3,108,832 |
Share based compensation | 5,766,329 | 1,896,400 |
Change in operating assets and liabilities: | ||
Accounts receivable | 3,035,002 | (58,087) |
Unbilled receivables | (9,460) | |
Prepaid expenses and other current assets | (216,083) | (197,501) |
Accounts payable and accrued expenses | (440,874) | (93,213) |
Deferred revenue | 30,461,506 | |
Deposits and other assets | 125 | (86,740) |
Net cash used in operating activities | (68,409,239) | (2,492,785) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Disposal of property and equipment | 956 | |
Purchases of equipment | (92,108) | (20,811) |
Net cash used in investing activities | (92,108) | (19,855) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable | 25,000,000 | 3,000,000 |
Proceeds from public offering, net | 96,923,231 | |
Note repayment | (27,894,062) | |
Payment of deferred financing fees | (2,170,328) | |
Payment of Make-Whole Interest | (5,000,000) | |
Settlement of warrant liability | (779,219) | |
Net cash provided by financing activities | 86,079,622 | 3,000,000 |
Net change in cash and cash equivalents | 17,578,275 | 487,360 |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (7,150) | 823 |
Cash and cash equivalents, beginning of period | 24,949,393 | 2,747,240 |
Cash and cash equivalents, end of period | 42,520,518 | 3,235,423 |
Cash investing and financing activities | ||
Cash paid for income taxes | 5,975 | |
Cash paid during the period for interest | 7,735,245 | 128,114 |
Non-cash investing and financing activities | ||
Conversion of convertible notes and interest to shares of common stock | 4,677,899 | 1,857,001 |
Settlement of warrants | 12,894,165 | |
Warrant liability which ceases to exist | 50,307,400 | |
Debt discount for derivative and warrant liability | 22,046,843 | 2,054,731 |
Shares issued for settlement of liability | 11,066,605 | |
Derivative ceases to exist - reclassified to paid in capital | 1,734,940 | 882,199 |
Reclassification of warrant from public offering to derivative liability | 158,944,800 | |
Non-cash fees relating to public offering | 19,100 | |
Shares issued for prepaid services | 1,020,905 | |
Conversion of convertible notes and interest to shares of common stock | $ 6,375,714 |
General
General | 3 Months Ended |
Mar. 31, 2018 | |
General [Abstract] | |
General | 1. General The accompanying unaudited condensed interim consolidated financial statements (“interim statements”) of Helios and Matheson Analytics Inc. (“Helios and Matheson” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2017 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2017. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2017. |
Business and Basis of Presentat
Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Business and Basis of Presentation [Abstract] | |
Business and Basis of Presentation | 2. Business and Basis of Presentation Business Since 1983, the Company has provided high quality information technology, or IT, services and solutions including a range of technology platforms focusing on big data, business intelligence, and consumer-centric technology. More recently, to provide greater value to stockholders, the Company has sought to expand its business primarily through acquisitions that leverage its capabilities and expertise. On November 9, 2016, the Company acquired Zone Technologies, Inc., a Nevada corporation (“Zone”), a state-of-the-art mapping and spatial analysis company. On December 11, 2017 the Company acquired a majority interest in MoviePass Inc., a Delaware corporation (“MoviePass”), whose primary product offering is MoviePass™, the nation’s premier movie theater subscription service. MoviePass provides subscribers with access to up to one new movie title in theaters per day, subject to the MoviePass terms of use, at a fixed monthly, quarterly, semi-annual or annual fee. In January 2018, the Company formed the Company’s wholly-owned subsidiary, MoviePass Ventures LLC, a Delaware limited liability (“MoviePass Ventures”), which aims to collaborate with film distributors to share in film revenues while using the data analytics that MoviePass offers for marketing and targeting services reaching MoviePass’ paying subscribers using the platform. Basis of Presentation The Company’s condensed consolidated financial statements have been prepared in accordance with U.S. GAAP. The condensed consolidated financial statements include all accounts of the Company and its wholly owned and majority owned subsidiaries. The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated. The Company consolidated the operations of MoviePass as of December 11, 2017. Use of Estimates The preparation of financial statements in conformity with 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 dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, but are not limited to, allowance for doubtful accounts, purchase accounting allocations, recoverability and useful lives of property, plant and equipment, identifiable intangibles and goodwill, warrant liability, derivative liabilities, the valuation allowance of deferred taxes, contingencies and equity compensation. Actual results could differ from those estimates. Reclassification Certain prior period amounts have been reclassified to conform to current period presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Revenue Recognition Consulting revenues are recognized as services are provided. The Company primarily provides consulting services under time and material contracts, whereby revenue is recognized as hours and costs are incurred. Clients for consulting revenues are billed on a weekly or monthly basis. Revenues from fixed fee contracts are recorded when work is performed on the basis of the proportionate performance method, which is based on costs incurred to date relative to total estimated costs. Any anticipated contract losses are estimated and accrued at the time they become known and estimable. Unbilled accounts receivables represent amounts recognized as revenue based on services performed in advance of customer billings. Revenue from sales of software licenses is recognized upon delivery of the software to a customer because future obligations associated with such revenue are insignificant. As of March 31, 2018, the Company owned approximately 81.2% of MoviePass. Subscription revenue consists primarily of subscription fees for monthly, quarterly, semi-annual or annual subscriptions. Revenue from subscriptions is recognized on a straight-line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services can be used by our subscribers at any time. Consumers purchasing subscriptions generally pay on an annual or monthly basis, and any prepaid amounts for subscription services are recorded as deferred revenue and amortized to revenue evenly over the service period which begins once a subscriber has activated his or her subscription. The Company also generates revenue from marketing services primarily related to major motion picture releases. Marketing revenue is generated through e mail and digital advertising to the Company’s subscriber base and pursuant to a contract for such services with the movie distributor. Such agreements are short term and are generally represented by a fully executed customer agreement. Revenue is recognized as performance obligations are satisfied which generally occurs within a month of the date the contract begins. Payment terms on marketing agreements vary and payment is generally due once the performance obligations have been satisfied. Adoption of ASC 606 Revenue from Contracts with Customers The Company adopted the new revenue standard, ASC 606, using the modified retrospective method with respect to all non-completed contracts as of January 1, 2018. This method required retrospective application of the new accounting standard to all unfulfilled contracts that were outstanding as of January 1, 2018. Revenues and contract assets and liabilities for contracts completed prior to January 1, 2018 are presented in accordance with ASC 606. The Company has determined that there were no adjustments required with respect to the adoption of ASC 606 with respect to any prior periods. Disaggregation of Revenue Three Months Ended 2018 2017 Types of revenues: Consulting $ 839,503 $ 1,358,062 Subscription 47,162,447 - Marketing and promotional services 1,440,910 - Total revenues $ 49,442,860 $ 1,358,062 The following is a description of the principal activities from which the Company generates revenue, including from subscribers and consulting customers. Consulting Revenue Consulting revenues are recognized as services are provided. The Company primarily provides consulting services under time and material contracts, whereby revenue is recognized as hours and costs are incurred. Clients for consulting revenues are billed on a weekly or monthly basis. Revenues from fixed fee contracts are recorded when work is performed on the basis of the proportionate performance method, which is based on costs incurred to date relative to total estimated costs. Any anticipated contract losses are estimated and accrued at the time they become known and estimable. Unbilled accounts receivables represent amounts recognized as revenue based on services performed in advance of customer billings. Revenue from sales of software licenses is recognized upon delivery of the software to a customer because future obligations associated with such revenue are insignificant. Subscription Revenue Subscription revenue consist of subscription fees related to monthly, quarterly, semi-annual and annual subscriptions to the MoviePass service. Once a subscriber activates his or her account, revenue is recognized on a straight-line basis when the performance obligation to provide each service for the period is satisfied, which is over time as our subscription service is continuously available to our subscribers. Marketing and Promotional Services Marketing and promotional services consists of services associated with the MoviePass business. The Company recognizes revenue from marketing contracts with customers when the performance obligations have been completed and the service has been provided to the customer. Deferred Revenue Subscription fees are generally paid in advance by credit card through merchant processors. Subscription fees received in advance of completion of the performance obligations are recorded as deferred revenue until such time the services are provided to the customer. Goodwill The Company reviews goodwill for impairment during the fourth quarter of each year, and also upon the occurrence of a triggering event. The Company performs reviews of each of its operating divisions that have goodwill balances. Generally, fair value is determined using a multiple of earnings, or discounted projected future cash flows, and is compared to the carrying value of a reporting unit for purposes of identifying potential impairment. Projected future cash flows are based on management’s knowledge of the current operating environment and expectations for the future. Goodwill impairment is recognized for any excess of the carrying value of the reporting unit’s goodwill over the fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of the general economic outlook, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company, and trends in the market price of our common stock. Each factor is assessed to determine whether it impacts the impairment test as well as the magnitude of any such impact. For the three months ended March 31, 2018 and 2017, the Company did not record an impairment on goodwill. Intangible Assets, net Intangible assets consist of customer relationships, technology, trademarks, broker relationships and patents. Applicable long-lived assets are amortized or depreciated over the shorter of their estimated useful lives, the estimated period that the assets will generate revenue, or the statutory or contractual term in the case of patents. Estimates of useful lives and periods of expected revenue generation are reviewed periodically for appropriateness and are based upon management’s judgment. Intangible assets are amortized on the straight-line method over their useful lives ranging from 3 to 12 years. The Company recorded amortization expense of $1,255,859 and $426,651 for the three months ended March 31, 2018 and 2017, respectively. The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether certain triggering events have occurred. These events include current period losses or a projection of continuing losses or a significant decrease in the market value of an asset. When a triggering event occurs, an impairment calculation is performed, comparing projected undiscounted future cash flows, utilizing current cash flow information and expected growth rates, to the respective carrying value. If the Company identifies impairment for long-lived assets to be held and used, the Company compares the assets’ current carrying value to the assets’ fair value. Fair value is based on current market values or discounted future cash flows. The Company records impairment when the carrying value exceeds fair market value. With respect to owned property and equipment held for disposal, the value of the property and equipment is adjusted to reflect recoverable values based on previous efforts to dispose of similar assets and current economic conditions. Impairment is recognized for the excess of the carrying value over the estimated fair market value, reduced by estimated direct costs of disposal. The Company did not record impairment charges in regard to definite-lived intangible assets for the three months ended March 31, 2018 and 2017. Research and Development Research and development costs are charged to operations when incurred and are included in operating expenses. Stock Based Compensation The Company follows the fair value recognition provisions in ASC 718, Stock Compensation Equity Fair Value Measurements ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted prices (unadjusted) in an active market for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that are supported by little or no market activity; therefore the inputs are developed by the Company using estimates and assumptions that the Company expects a market participant would use. The carrying value of the Company’s short-term investments, prepaid expenses and other current assets, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. The derivative liability in connection with the conversion feature of the Company’s convertible debt and the warrant liability is classified as a level 3 liability. Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. The Company developed an implementation plan to adopt this new guidance, which included an assessment of the impact of the new guidance on the Company’s financial position and results of operations. On January 1, 2018, the Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers During January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows Restricted Cash The following accounting standards updates were recently issued and have not yet been adopted by us. These standards are currently under review to determine their impact on our consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases, In October 2016, the FASB issued ASU 2016-16, Income Taxes Intra-Entity Transfers of Assets Other than Inventory In January 2017, the FASB issued ASU 2017-04 Intangibles-Goodwill and Other Simplifying the Accounting for Goodwill Impairment In July 2017, the FASB issued ASU 2017-11, Earnings Per Share Distinguishing Liabilities from Equity |
Going Concern Analysis
Going Concern Analysis | 3 Months Ended |
Mar. 31, 2018 | |
Going Concern Analysis [Abstract] | |
Going Concern Analysis | 4. Going Concern Analysis During the second quarter of 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. Under this standard, the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods. In evaluating the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the Company’s financial statements were issued (May 15, 2018). Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s conditional and unconditional obligations due before May 15, 2019. The Company is subject to a number of risks similar to those of other big data technology, technology consulting companies and subscription based businesses, including its dependence on key individuals, uncertainty of product development and generation of revenues and positive cash flow, dependence on outside sources of capital, risks associated with research, development, testing, and successful protection of intellectual property, the Company’s ability to maintain and grow its subscriber base and the Company’s susceptibility to infringement on the proprietary rights of others. The attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill the Company’s growth and operating activities and generating a level of revenues adequate to support the Company’s cost structure. The Company has experienced net losses and significant cash outflows from cash used in operating activities over the past years. As of and for the three months ended March 31, 2018, the Company had an accumulated deficit of $184,319,310 a loss from operations of $107,731,993 and net cash used in operating activities of $68,409,239. The Company expects to continue to incur net losses and have significant cash outflows for at least the next 12 months. As of March 31, 2018, the Company had cash and a working capital deficit of $42,520,518 and $109,001,531, respectively. Of the working capital deficit, $70,730,100 pertained to warrant and derivative liabilities classified on the balance sheet within short term liabilities. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the condensed consolidated financial statements were issued. While management will look to continue funding operations by raising additional capital from sources such as sales of its debt or equity securities or loans in order to meet operating cash requirements, there is no assurance that management’s plans will be successful. The Company obtained convertible debt financing for up to $60,000,000 in gross proceeds on January 11, 2018, of which the Company had received $25,000,000 in gross proceeds as of March 31, 2018, which the Company used (i) to increase the Company’s ownership interests or other rights and interests in MoviePass; (ii) to satisfy certain indebtedness; and (iii) for general corporate purposes and transaction expenses. The Company may also use the proceeds to make other acquisitions. The Company had $695,270 of make-whole principle balance outstanding under the Senior Convertible Notes issued to institutional investors on November 7, 2017 and January 23, 2018, and there remained $114,350,000 in restricted principal for which a corresponding amount of principal under the investor notes remains to be paid to the Company by the holders of those convertible notes. In order to facilitate the Company’s further access to capital, in January 2018 the Company filed a shelf registration statement on form S-3 that was declared effective by the Securities and Exchange Commission on February 9, 2018, which allows the Company to offer and sell up to $400,000,000 of its equity or equity-linked securities. This aggregate offering amount includes up to $150 million of common stock that the Company may sell at prevailing market prices in a continuous at-the market offering through its sales agent Canaccord Genuity LLC. Using the shelf registration statement, the Company completed an underwritten public offering of common stock and warrants for gross proceeds of approximately $105.0 million on February 13, 2018. The total net proceeds to the Company from the public offering were $96.9 million. Without raising additional capital, there is substantial doubt about the Company’s ability to continue as a going concern through May 15, 2019. The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business. A successful transition to attaining profitable operations is dependent upon achieving a level of positive cash flows adequate to support the Company’s cost structure. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2018 | |
Acquisitions [Abstract] | |
Acquisitions | 5. Acquisitions Acquisition of Controlling Interest in MoviePass Inc. On December 11, 2017, the Company completed its acquisition of a 62.41% majority interest in MoviePass Inc., a Delaware corporation (“MoviePass”, and such acquisition, the “MoviePass Transaction”), for the following consideration: (1) a subordinated convertible promissory note in the principal amount of $12,000,000 (the “Helios Convertible Note”), which is convertible into shares of HMNY’s common stock, as further described below; (2) a $5,000,000 promissory note issued to MoviePass (the “Helios Note”); (3) the exchange of a convertible promissory note issued by MoviePass to HMNY in an aggregate principal amount of $11,500,000 (plus accrued interest thereon); (4) $1,000,000 in cash to purchase outstanding convertible notes of MoviePass, which were converted into shares of MoviePass’ common stock amounting to an additional 2% of the outstanding shares of MoviePass common stock; and (5) $20,000,000 in cash pursuant to the Investment Option Agreement, dated October 11, 2017, between the Company and MoviePass. The Helios Convertible Note will convert into 4,000,000 unregistered shares of the Company’s common stock (the “Conversion Shares”) automatically upon the Company’s receipt of approval of its stockholders relating to the issuance of the Conversion Shares as required by and in accordance with Nasdaq Listing Rule 5635 (the “Stockholder Approval”). Of that amount, 666,667 of the Conversion Shares are subject to forfeiture by MoviePass, in the Company’s sole discretion, as MoviePass failed to list its common stock on the Nasdaq Stock Market by March 31, 2018 (as required by the securities purchase agreement between the Company and MoviePass). As of the date of this report, the Company has not made a decision with respect to the disposition of those shares that are subject to forfeiture. The Company has valued the Helios Convertible Note as of the acquisition date including the valuation of the shares subject to forfeiture as noted above, at the fair value on the acquisition date based on a Monte Carlo simulation. The shares subject to forfeiture are contingent consideration and have been valued as a separate component of the Helios Convertible Note. As of the acquisition date the Helios Convertible Note was valued at $29,000,000 and the portion of the Conversion Shares subject to forfeiture was valued at $5,152,446. All of the purchase consideration, with the exception of the $1,000,000 paid for the MoviePass convertible notes which were converted into MoviePass common stock, was retained by MoviePass. Accordingly, the value of the Helios Convertible Note, the Helios Note and the value associated with the Conversion Shares subject to forfeiture are eliminated in consolidation for financial reporting purposes. Goodwill recognized as part of the MoviePass acquisition is not expected to be tax deductible. The Company has determined preliminary fair values of the assets acquired and liabilities assumed in the MoviePass Transaction. These values are subject to change as management performs additional reviews of the assumptions utilized. The Company has made a provisional allocation of the purchase price of the MoviePass Transaction to the assets acquired and the liabilities assumed as of the acquisition date. The following table summarizes the provisional purchase price allocations relating to the MoviePass Transaction. Purchase consideration: MoviePass Cash $ 32,671,792 Notes payable (includes Helios Convertible Note and Helios Note) 39,152,446 Fair value of consideration transferred $ 71,824,238 Recognized amounts of identifiable assets and liabilities acquired: Cash acquired $ 1,106,171 Accounts receivable 9,669,390 Notes receivable 39,152,446 Investment option payment receivable 7,850,000 Prepaid expenses and other current assets 192,180 Property and equipment 39,320 Other assets 8,000 Identifiable intangible assets: Tradenames and trademarks 19,550,000 Technology 3,800,000 Customer relationships 2,560,000 Liabilities assumed (9,261,785 ) Deferred revenue (38,718,397 ) Non-controlling interest (43,260,264 ) Goodwill 79,137,177 Total purchase price allocation $ 71,824,238 The Company has not completed the valuation studies necessary to finalize the acquisition fair values of the assets acquired and liabilities assumed and related allocation of purchase price for the MoviePass Transaction. Accordingly, the type and value of the intangible assets and deferred revenue amounts set forth above are preliminary. Once the valuation process is finalized for the MoviePass Transaction, there could be changes to the reported values of the assets acquired and liabilities assumed, including goodwill, intangible assets and deferred revenue and those changes could differ materially from what is presented above. The Company determined the provisional fair value of the acquired intangible assets through a combination of the market approach and the income approach. The significant assumptions used in certain valuations associated with the MoviePass Transaction include discount rates ranging from 10.0% to 51.0%. In determining the value of tradenames and trademarks the Company observed royalty rates ranging from 0.0% to 100.0%, and utilized a 1.0% rate for MoviePass’s aggregated tradenames and trademarks. Additionally, the Company observed royalty rates related to MoviePass’s technology assets acquired ranging from 0.0% to 50.0%, and used a 1.0% royalty rate in determining the fair value of the acquired technology. In accordance with EITF guidance, the fair value of an acquired liability related to deferred revenue would include the direct and incremental cost of fulfilling the obligation plus a normal profit margin. The Company utilized historical operating results in estimating the direct and incremental costs of fulfilling the acquired deferred revenue obligations. The Company recorded an amount of $43,260,264 representing the non-controlling interest of MoviePass. The non-controlling interest in MoviePass was determined based on the fair value of MoviePass less the amounts paid by the Company for its 62.41% controlling interest. The estimated useful lives of acquired intangible assets are 7 years for customer relationships, 3 years for technology, and 7 years for tradenames and trademarks. Acquired deferred revenue is estimated to be realized based on the length of the subscription, over 12 months from the acquisition date. Additional MoviePass Subscription Agreements On March 8, 2018, the Company entered into a Subscription Agreement with MoviePass (the “March 2018 Agreement”), pursuant to which, in lieu of repayment of advances totaling $55,525,000 made by the Company, MoviePass agreed to sell to the Company an amount of MoviePass Common Stock equal to 18.79% of the total then outstanding shares of MoviePass Common Stock (excluding shares underlying MoviePass options and warrants) (the “March 2018 MoviePass Purchased Shares”). MoviePass also agreed to issue to the Company, in addition to the March 2018 MoviePass Purchased Shares, without payment of additional consideration by the Company, for purposes of anti-dilution, an amount of shares of MoviePass Common Stock that caused the Company’s total ownership of the outstanding shares of MoviePass Common Stock (excluding shares underlying MoviePass options and warrants), together with the March 2018 MoviePass Purchased Shares, to equal 81.2% as of March 8, 2018. The Company has accounted for the March 2018 MoviePass Purchased Shares as an acquisition of a portion of the non-controlling interest in MoviePass. Accordingly, the non-controlling interest at March 8, 2018 was reduced based on the percentage acquired, and the balance invested in excess of the value of the non-controlling interest acquired was recorded as additional invested capital. |
Net Income_(Loss) Per Share Att
Net Income/(Loss) Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2018 | |
Net Income/(Loss) Per Share Attributable to Common Stockholders [Abstract] | |
Net Income/(Loss) Per Share Attributable to Common Stockholders | 6. Net Income/(Loss) Per Share Attributable to Common Stockholders Earnings per share (“EPS”) is the amount of earnings attributable to each share of common stock. For convenience, the term is used to refer to either earnings or loss per share. EPS is computed pursuant to Section 260-10-45 of the FASB Accounting Standards Codification. Pursuant to ASC Paragraphs 260-10-45-10 through 260-10-45-16, basic EPS is computed by dividing income available to common stockholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangements, stock options or warrants. The calculation of diluted EPS excludes 4,934,555 shares for securities deemed to be anti-dilutive. The following sets forth the computation of diluted EPS for the three months ended March 31, 2018 and March 31, 2017: Three months ended March 31, 2018 Net Income Available to Common Stockholders (Numerator) Shares (Denominator) Per Share Amount Basic EPS $ 5,175,875 34,850,281 $ 0.15 Assumed conversion of convertible notes (1,940,056 ) - - Dilutive shares related to warrants and convertible notes - 1,752,086 - Dilutive EPS $ 3,235,819 36,602,367 $ 0.09 Three months ended March 31, 2017 Net Loss Available to Common Stockholders (Numerator) Shares (Denominator) Per Share Amount Basic EPS $ (6,496,732 ) 5,530,083 $ (1.17 ) Dilutive shares related to warrants and convertible notes - - - Dilutive EPS $ (6,496,732 ) 5,530,083 $ (1.17 ) |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Mar. 31, 2018 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Prepaid Expenses and Other Current Assets | 7 . Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following on March 31, 2018 and December 31, 2017: March 31, December 31, 2017 Vendor deposits $ 152,285 $ 147,533 Tax 99,407 108,433 Deposits 226,750 230,711 Insurance 78,797 86,181 Professional fees and services 549,140 33,333 Deferred stock compensation 2,054,341 2,885,278 Rent 42,779 52,650 Other 63,828 13,692 Total prepaid expenses and other current assets $ 3,267,327 $ 3,557,811 |
Intangible Assets, net
Intangible Assets, net | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | 8. Intangible Assets, net The following table sets forth the major categories of the Company’s intangible assets and the estimated useful life as of March 31, 2018 and December 31, 2017 for those assets that are not already fully amortized: Estimated Gross March 31, 2018 Useful Life (Years) Carrying Amount Accumulated Amortization Impairments Net Book Value Customer relationships 7 $ 2,560,000 $ (112,074 ) $ - $ 2,447,926 Technology 3 8,070,000 (2,373,259 ) - 5,696,741 Tradenames and trademarks 7 19,550,000 (599,113 ) - 18,950,887 Patents 12 196,353 (12,196 ) - 184,157 $ 30,376,353 $ (3,096,642 ) $ - $ 27,279,711 Estimated Gross December 31, 2017 Useful Life (Years) Carrying Amount Acquisitions Accumulated Amortization Impairments Net Book Value Customer relationships 7 $ - $ 2,560,000 $ (20,645 ) $ - $ 2,539,355 Technology 3 4,270,000 3,800,000 (1,700,431 ) - 6,369,569 Tradenames and trademarks 7 1,977,000 19,550,000 (433,588 ) (1,653,776 ) 19,439,636 Broker relationships 5 4,200 - (962 ) (3,238 ) - Patents 12 196,353 - (8,131 ) - 188,222 $ 6,447,553 $ 25,910,000 $ (2,163,757 ) $ (1,657,014 ) $ 28,536,782 The Company recorded amortization expense of $1,255,859 and $426,651 for the three months ended March 31, 2018 and 2017, respectively. The following table outlines estimated future annual amortization expense for the next five years and thereafter: March 31, Remaining 2018 $ 3,770,233 2019 4,821,384 2020 3,532,137 2021 2,336,976 2022 2,336,976 Thereafter 10,482,005 $ 27,279,711 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Accounts Payable and Accrued Expenses | 9. Accounts Payable and Accrued Expenses As of March 31, 2018 and December 31, 2017, accounts payable and accrued expenses consisted of the following: March 31, December 31, 2017 Accounts payable $ 5,412,887 $ 5,087,060 Accrued ticket expense 1,852,876 4,743,582 Accrued professional fees 2,719,192 597,187 Accrued credit card fees - 782,670 Accrued payroll expense 1,079,841 312,149 Accrued other expense 869,818 852,840 Accrued interest 1,393,476 768,515 Total accounts payable and accrued expenses $ 13,328,090 $ 13,144,003 |
Senior Secured Convertible Note
Senior Secured Convertible Notes and Warrants | 3 Months Ended |
Mar. 31, 2018 | |
Senior Secured Convertible Notes and Warrants [Abstract] | |
Senior Secured Convertible Notes and Warrants | 10. Senior Secured Convertible Notes and Warrants On February 8, 2017, the Company issued two Senior Secured Convertible Notes (the “February 2017 Notes”) to an institutional investor (the “Investor”) in the aggregate principal amount of $5,681,818 for consideration consisting of a secured promissory note payable by the Investor to the Company in the principal amount of $5,000,000 (the “February 2017 Investor Note”) which offsets the February 2017 notes of the same amount. Upon issuance, the initial note with a principal balance of $681,818 was accounted for as an original issuance discount and accreted into interest expense over the life of the February 2017 Notes. As cash payments are applied to the February 2017 Investor Note, a derivative liability is recognized and placement agent warrants are issued. Both the derivative liability and the warrants are accounted for as debt discount to the February 2017 Notes and accreted into interest expense over the life of the note using the effective interest method. The February 2017 Notes had a maturity date of October 8, 2017. As of December 31, 2017, the Investor had fully prepaid the February 2017 Investor Note and had subsequently converted the principal amount due under the February 2017 Notes and approximately $49,000 of interest into 1,852,886 shares of the Company’s common stock in full payment of the February 2017 Notes. On any principal balance owed by the Company to the Investor, a 6% interest obligation was due quarterly and calculated on a 360-day basis. For the three months ended March 31, 2018 and March 31, 2017, the Company had interest expense of $0 and $10,277, respectively, related to the February 2017 Notes as the final principal balance was converted in August 2017. In a letter agreement executed on August 27, 2017, in consideration for the prepayment in the amount of $2,500,000, on the February 2017 Investor Note, which the Investor subsequently made on August 28, 2017, the Investor and the Company agreed that the Investor would have the right, but not the obligation, until December 31, 2017, to effect an exchange (the “Share Exchange”) of 841,250 shares of the Company’s common stock (the “Exchange Shares”) for one or more senior secured convertible promissory notes in the form of the February Additional Note (the “New Note”), with the right to substitute the alternate conversion price of the New Note with the alternate conversion price of the Company’s Series B Senior Secured Convertible Note (the “Series B Note”) that was issued on August 16, 2017. Any New Note issued would be in a principal amount equal to the product of the prepayment amount ($2,500,000) multiplied by a fraction, the numerator of which is the number of the aggregate shares being tendered to the Company in the Share Exchange and the denominator of which is 841,250. The maturity date of any New Note was 45 days following the issuance of the New Note, and the conversion price of the New Notes was $4.50, or, at the election of the Investor, the Investor could convert at the Alternate Conversion Price. The Alternate Conversion Price was defined as either (A) the lower of (i) $4.50 and (ii) the greater of (I) $4.00 and (II) 85% of the quotient of (x) the sum of the volume weighted average price of the common stock for each of the 5 consecutive trading days ending on the trading day immediately preceding the delivery of the Conversion Notice, divided by (y) 5 or (B) that price which shall be the lowest of (i) $3.00 and (ii) the greater of (I) the Floor Price then in effect and (II) 85% of the quotient of (x) the sum of the volume weighted average price of the Company’s common stock for each of the 5 consecutive trading days ending and including the date of the alternate conversion, divided by (y) 5. The Floor Price was defined as $3.00 through October 4, 2017 and $0.50 following October 4, 2017. On October 23, 2017, the Company and the Investor entered into a Third Amendment and Exchange Agreement (the “Third Exchange Agreement”) for the purpose of exchanging the New Note for 947,218 shares of common stock (the “New Exchange Shares”) and rights (the “Rights”) to receive 552,782 additional shares of common stock. As partial consideration for the New Exchange Shares and the Rights, the Investor agreed, among other things, to terminate the Investor’s right to exchange the remaining Exchange Shares for New Notes. The termination of these rights is accounted for as financing fees associated with the February 2017 Notes and valued at $19,950,000 based on the trading price of the Company’s stock on the date of the Third Exchange Agreement. On August 16, 2017, the Company issued to the Investor three Senior Secured Convertible Notes (the “August 2017 Notes”) in the aggregate principal amount of $10,300,000 and a 5-year warrant for the purchase of 1,892,972 shares of the Company’s common stock at an exercise price of $3.25 per share (the “Investor Warrant”) for consideration consisting of a secured promissory note payable by the Investor to the Company (the “August 2017 Investor Note”) in the principal amount of $8,800,000 and $220,000 which offsets the August 2017 Notes of the same amount. The August 2017 Notes have a maturity date of April 16, 2018 and the Investor Warrant will expire on April 16, 2022. The $220,000 secured promissory note payable by the Investor was issued in exchange for a $250,000 Senior Secured Convertible Note; therefore, a discount of $30,000 was recognized upon issuance and accreted into interest expense over the life of the note using the effective interest method. Upon issuance, the Investor Warrant was recorded at fair value and accounted for as an original issuance discount to the August 2017 Notes. The excess in value of the Investor Warrant over the August 2017 Notes upon issuance was recorded as interest expense, while the capitalized balance was accreted into interest expense over the life of the August 2017 Notes. At December 31, 2017, the contracted conversion prices for the August 2017 Notes, which include an Initial Series A Note, an Additional Series A Note and the Series B Note, were $4.00 for the Initial Series A Note and the Additional Series A Note and $3.00 for the Series B Note. As of December 31, 2017, the Investor had fully prepaid the August 2017 Investor Note and subsequently converted $5,794,560 in principal amount, plus accrued interest, of the August 2017 Notes into 1,482,639 shares of the Company’s common stock. As of December 31, 2017, the unpaid principal amount of the August 2017 Notes owed to the Investor was $4,505,440. On any principal balance owed by the Company to the Investor, a 6% interest obligation is due quarterly and calculated on a 360-day basis. For the three months ended March 31, 2018, the Company had $37,126 of interest expense pertaining to the unpaid principal amount of the August 2017 Notes. The full outstanding principal balance of $4,677,899 and accrued interest of $37,126 were converted to 1,169,475 shares of the Company’s common stock on February 20, 2018. The Investor Warrant included anti-dilution provisions. The anti-dilution provisions were triggered when the Company issued a new senior convertible note to the Investor in the aggregate principal amount of $697,000 (the “Exchange Note”). Because the Exchange Note had a conversion price of $3.00 per share, which was lower than the Investor Warrant per share exercise price of $3.25, the number of shares of the Company’s common stock issuable to the Investor pursuant to the Investor Warrant was increased from 1,892,972 to 2,050,720 and the per share exercise price of the Investor Warrant was decreased from $3.25 to $3.00. As of December 31, 2017, the Investor had elected, in a cashless transaction, to exercise the Investor Warrant to purchase 1,715,006 shares of common stock and also paid the Company the sum of $977,142 to exercise the Investor Warrant for an additional 325,714 shares of common stock. On November 21, 2017 in conjunction with the Fourth Amendment and Exchange Agreement, the remaining 10,000 shares of common stock subject to the Investor Warrant were exchanged for a new warrant (the “Exchange Warrant”). The Exchange Warrant is in substantially the form of the Investor Warrant, except that: ● The Exchange Warrant has an exercise price of $14.31. ● The expiration date of the Exchange Warrant is November 21, 2022. ● The Exchange Warrant may not be exercised for the purchase of shares of common stock unless the stockholders of the Company approve the issuance in compliance with the rules and regulations of the Nasdaq Capital Market, which stockholder approval was obtained at a special meeting of the Company’s stockholders in October 2017. ● The Exchange Warrant is subject to redemption, refund or alternate cashless exercise after the August Note is no longer outstanding (or on or after February 16, 2018 if the Company fails to remain current in its filings or an event of default under the August 2017 Notes occurs). In exchange for the Company’s receipt of the waivers described above, including without limitation, the Additional Offering Prohibition Waiver, the Company and the holder of the Exchange Warrant agreed that after the Adjustment Time, one of the following shall occur: (i) if the net proceeds from the sale of shares of common stock issuable upon conversion of the Remaining August Note by the holder of the Exchange Warrant exceeds $18.1 million (subject to reduction for any cash payment of the Remaining August Note), the Company will receive up to the first $5 million in excess of such amount; (ii) if the net proceeds from the sale of shares of common stock issuable upon conversion of the Remaining August Note by the holder of the Exchange Warrant is less than $18.1 million (subject to reduction for any cash payment of the Remaining August Note) (such difference, the “Redemption Maximum Amount”), either of the following may occur: ● If the Stockholder Approval has been obtained, the holder of the Exchange Warrant may request to affect an alternate cashless exercise of the Exchange Warrant, in whole or in part, pursuant to which, in lieu of the shares of common stock issuable upon exercise of the Exchange Warrant, the holder would receive up to the Redemption Maximum Amount in shares of common stock at the Alternate Cashless Exercise Price (as defined below) (an “Alternate Cashless Exercise”); or ● The holder of the Exchange Warrant may request a redemption in cash of all, or any part, of the Exchange Warrant at a price equal to such difference; provided, that if certain equity conditions are met (including obtaining the Stockholder Approval), the Company may elect to pay such redemption price in shares of common stock in an Alternate Cashless Exercise. The Alternate Cashless Exercise Price is defined as that price which shall be the greater of (x) $2.86 and (y) the lowest of (i) the applicable exercise price as in effect on the applicable exercise date, (ii) 85% of the VWAP of the shares of common stock as of the trading day immediately preceding the trading day of delivery of the applicable exercise notice, and (iii) 85% of the lowest VWAP of the shares of common stock on any trading day during the 2 trading day period commencing on, and including, the trading day of the delivery of the applicable exercise notice. In March 2018, the Investor converted the entire Exchange Warrant into 3,265,186 shares of our common stock at pursuant to an Alternate Cashless Exercise. With the issuance of the Exchange Warrant, the resulting cash flows of the remaining Investor Warrant were considered to be significantly modified within the context of ASC 470. Accordingly, the incremental change in fair value between the Investor Warrant and the Exchange Warrant is calculated as $12,878,864 and recorded as interest expense. In March of 2018 the Investor exercised the Exchange Warrant by means of a cashless exercise into 4,353,581 shares of common stock and a cash payment from the Company of $779,219, resulting in a reduction of the warrant liability and corresponding adjustment to Additional Paid in Capital. On November 7, 2017, the Company issued two Senior Secured Convertible Notes in the aggregate principal amount of $100,000,000 (collectively, the “November 2017 Notes”) to institutional investors. The November Notes consist of a Senior Secured Convertible Note in the amount of $5,000,000 (the “November Initial Note”) and a Senior Secured Convertible Note in the amount of $95,000,000 (the “November Additional Note”) in exchange for an upfront cash payment of $5,000,000 and a senior secured promissory note of $95,000,000 (the “November 2017 Investor Note”). As of December 31, 2017, purchasers of the November 2017 Notes prepaid $15,650,000 of the November 2017 Investor Note with the remaining principal being subject to master netting agreements between the Company and such holders. In conjunction with the prepayment, the Company was also obligated to pay the holders interest which would have accrued with respect to the outstanding balance for the period from the redemption date through the maturity date (the “Make-Whole Interest”). The Company elected to defer payment of the Make-Whole Interest by capitalizing the full balance under the same terms as the original November 2017 Notes. As of December 31, 2017 the outstanding balance owed on the Make-Whole Interest was $2,943,069. On January 2, 2018, an additional $646,263 of interest was capitalized and added to the principal balance of the note and on January 26, 2018 investors redeemed principal of $2,894,062 in exchange for cash. The November 2017 Notes have a maturity date of November 7, 2019. As of December 31, 2017, the contracted conversion price for the November 2017 Notes, which include both the November Initial Note and November Additional Note, was $12.06. As of December 31, 2017, the Investors had converted $0 of the November 2017 Notes into shares of the Company’s common stock. On any unfunded principal balance of the November 2017 Investor Notes the Company owed to the Investors a 5.25% interest obligation which is due quarterly and calculated on a 360-day basis. For the funded portion of the November 2017 Notes the Company has a 10% interest obligation. For the three months ended March 31, 2018, the Company had $1,394,169 of interest expense pertaining to the November 2017 Notes and $1,394,169 accrued at March 31, 2018. On January 23, 2018, pursuant to a securities purchase agreement (the “SPA”) entered into by the Company and an institutional investor (the “Buyer”), the Company sold and issued senior convertible notes in the aggregate principal amount of $60,000,000 (each, a “Note” and collectively, the “Notes”), consisting of (i) a Series A-1 Senior Bridge Subordinated Convertible Note in the aggregate principal amount of $25,000,000 (the “Series A-1 Note”) and (ii) a Series B-1 Senior Secured Bridge Convertible Note in the aggregate principal amount of $35,000,000 (the “Series B-1 Note”) for consideration consisting of (i) a cash payment in the aggregate amount of $25,000,000 (the “Cash Amount”), and (ii) a secured promissory note payable by the Buyer to the Company (the “Investor Note”) in the aggregate principal amount of $35,000,000 (the “Financing”). The date on which the Notes were issued is referred to as the “Closing Date.” Unless earlier converted or redeemed, the Notes will mature on the second anniversary of the Closing Date. The Company is required to redeem the Notes (i) at the option of the Buyer from and after June 7, 2018; (ii) at the option of the Buyer if the Company completes a subsequent public or private offering of debt or equity securities, including equity-linked securities (subject to certain excluded issuances); (iii) upon the occurrence of an Event of Default, including a Bankruptcy Event of Default (each, as defined in the Notes); or (iv) in the event of a Change of Control (as defined in the Notes). With the exception of a redemption required by an Event of Default, which may be paid with cash or shares of the Company’s common stock at the election of the Buyer, the Company will be required to redeem the Notes with cash. The Notes and the shares of common stock into which the Notes may be converted (collectively, the “Conversion Shares”) are sometimes referred to in this report as the “Securities.” All amounts outstanding under the Notes will be secured by the Investor Note and all proceeds therefrom. The Notes will not be secured by, and the Investors will not have a lien on, any assets of the Company other than the Investor Note. MoviePass Inc. has guaranteed the obligations arising under the Notes in accordance with the terms of a Guaranty (the “MoviePass Guaranty”). In accordance with the terms of the SPA, the Company is obligated to convene a special meeting of its stockholders on or prior to June 1, 2018, for the purpose of approving the issuance of all Securities that may be issued in connection with the Financing. Provided there has been no Equity Conditions Failure (as defined in the Notes) and, as to the Series A-1 Note, no senior secured convertible notes issued by the Company on August 16, 2017 (the “August Notes”) or senior convertible bridge notes issued by the Company on November 7, 2017 (the “November Notes”) remain outstanding, and as to the Series B-1 Note, no August Notes, November Notes, Series A-1 Note or Series B-1 Note with any Unrestricted Principal remain outstanding, the Company will have the right to redeem all, but not less than all, of the Outstanding Amount remaining unpaid under the Notes. The portion of the Notes subject to redemption can be redeemed by the Company in cash at a price equal to 115% of the amount being redeemed. Under the Series B-1 Note, the Company may reduce, on a dollar for dollar basis, the Restricted Principal by the surrender for cancellation of such portion of the corresponding Investor Note equal to the amount of Restricted Principal included in the redemption. The Buyer has the right to require the Company to redeem the Notes (i) at the option of the Buyer from and after June 7, 2018; (ii) if the Company completes a Subsequent Placement, as defined in the SPA; (iii) upon the occurrence of an Event of Default, including a Bankruptcy Event of Default (as defined in the Notes); or (iv) in the event of a Change of Control. With the exception of a redemption required by an Event of Default, which may be paid with cash or shares of the Company’s common stock at the election of the Buyer, the Company will be required to redeem the Notes with cash. On February 13, 2018, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity Inc., on behalf of itself and as representative of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell to the Underwriters in a best-efforts underwritten public offering (the “Offering”) up to approximately $105 million in gross proceeds of securities of the Company including (A) 7,425,000 Series A-1 units (the “Series A-1 Units”), with each Series A-1 Unit consisting of (i) one share (a “Share”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and (ii) one Series A-1 warrant to purchase one share of Common Stock (a “Series A-1 Warrant”); and for those purchasers whose purchase of Series A-1 Units would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 9.99% of the Company’s outstanding Common Stock following the consummation of the Offering, (B) 11,675,000 Series B-1 units (the “Series B-1 Units”, and together with the “Series A-1 Units”, the “Units”), consisting of (i) one pre-funded Series B-1 warrant to purchase one share of Common Stock (a “Series B-1 Warrant”; and the Series B-1 Warrants, together with the Series A-1 Warrants, the “Warrants”) and (ii) one Series A-1 Warrant. The Units were sold at a price to the public equal to $5.50 per Unit. Each Warrant is exercisable at any time on or after the issuance date until the five-year anniversary of the issuance date. Each Series A-1 Warrant is exercisable at a price of $6.50 per share of Common Stock. Each Series B-1 Warrant has an aggregate exercise price of $5.50 per share of Common Stock, all of which will be pre-funded except for a nominal exercise price of $0.001 per share of Common Stock. The Warrants will not be listed on The NASDAQ Capital Market or any other securities exchange. As of the date of this report, all Series B-1 Warrants have been exercised. The Company received approximately $96,923,231 in net proceeds from the sale of the Units, after deducting underwriting discounts and commissions equal to $5,882,800 and estimated offering expenses of approximately $450,000, not taking into account any exercise of the Warrants. The Placement Agent Notes and Warrants The Company entered into an agreement with a placement agent (the “Placement Agent”) for assistance with the placement of the February 2017 Notes. The Placement Agent accepted from the Company a 5-year warrant (each a “February Placement Agent Warrant”) as partial payment for the Placement Agent’s services. The February Placement Agent Warrants allow the purchase of up to 8% of the number of shares of the Company’s common stock into which the unrestricted principal of the February 2017 Notes may be converted. Through the first nine months of 2017, the Company received $5,000,000 of cash payments for the February 2017 Notes, resulting in the issuance of February Placement Agent Warrants for the purchase of 133,334 shares of common stock at an exercise price of $3.00 per share. As of March 31, 2018 the Placement Agent has not elected to exercise any February Placement Agent Warrants. The Company entered into an agreement with the Placement Agent for assistance with the placement of the August 2017 Notes and Investor Warrant. The Placement Agent accepted from the Company a 5-year warrant (each, an “August Placement Agent Warrant”) as partial payment for the Placement Agent’s services. The August Placement Agent Warrant allows the purchase of up to 8% of the number of shares of the Company’s common stock into which the unrestricted principal of the Additional Series A Note and the Series B Note in the combined principal amount of $9,050,000 becomes convertible at an exercise price equal to the greater of the exercise price of the August 2017 Notes and the consolidated closing bid price of the Company’s common stock on the date that the Placement Agent becomes entitled to the August Placement Agent Warrant. During the period ended December 31, 2017, the Company received $8,800,000 of cash payments in conjunction with the August 2017 Notes and issued August Placement Agent Warrants for the purchase of 176,000 shares of common stock at exercise prices of $3.00 and $14.27 per share. As of March 31, 2018, the Placement Agent has not elected to exercise any August Placement Agent Warrants. The Company entered into an agreement with the Placement Agent for assistance with the placement of the November 2017 Notes. The Placement Agent accepted from the Company a 5-year warrant (each, a “November Placement Agent Warrant”) as partial payment for the Placement Agent’s services. The November Placement Agent Warrant allows the purchase of up to 8% of the number of shares of the Company’s common stock into which the unrestricted principal of the November Series A Note and the November Series B Note in the combined principal amount of $100,000,000 becomes convertible at an exercise price equal to the greater of the exercise price of the November 2017 Notes and the consolidated closing bid price of the Company’s common stock on the date that the Placement Agent becomes entitled to the November Placement Agent Warrant. During the period ended March 31, 2018, the Company received no cash payments for the November 2017 Notes resulting in no issuances of warrants at an exercise prices of $12.06 per share. As of March 31, 2018, the Placement Agent has not elected to exercise any November Placement Agent Warrants. Note Activity: Senior Secured Convertible Notes consist of the following: March 31, 2018 December 31, 2017 August 2017 Notes $ - $ 2,061,072 November 2017 Notes 641,206 1,550,555 $ 641,206 $ 3,611,627 Under ASC 210-20-45-1, management offset the Notes by the Investor Notes yet to be funded. As of March 31, 2018, there was no unfunded portion of the Investor Note remaining. The carrying value of the Senior Secured Convertible Notes is comprised of the following: March 31, 2018 December 31, 2017 August 2017 Notes $ - $ 4,505,440 November 2017 Notes 695,270 2,943,069 Unamortized discounts (54,064 ) (3,836,882 ) $ 641,206 $ 3,611,627 During the three months ended March 31, 2018, the Investor has converted a total of $4,640,773 in principal and $37,126 in interest into 1,169,475 shares of the Company’s common stock. Warrant Activity: The following is a summary of the Company’s warrant activity during the three months ended March 31, 2018: Warrant Shares Weighted Average Exercise Price Weighted Outstanding/exercisable – December 31, 2017 9,631,588 $ 6.04 4.86 Granted 30,949,826 6.15 4.88 Exercised (10,860,000 ) 5.51 4.88 Outstanding/exercisable – March 31, 2018 29,721,414 $ 5.99 4.88 |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis [Abstract] | |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | 11. Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the Company’s consolidated balance sheets as of March 31, 2018 and December 31, 2017: Amount at Fair Value Measurement Using Fair Value Level 1 Level 2 Level 3 March 31, 2018 Liabilities Derivative liability – warrants $ 70,030,200 $ - $ - $ 70,030,200 Derivative liability – conversion feature 699,900 - - 699,900 Total $ 70,730,100 $ - $ - $ 70,730,100 December 31, 2017 Liabilities Derivative liability – warrants $ 67,288,800 $ - $ - $ 67,288,800 Derivative liability – conversion feature 4,834,462 - - 4,834,462 Total $ 72,123,262 $ - $ - $ 72,123,262 The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three months ended March 31, 2018: Amount Balance at December 31, 2017 $ 72,123,262 Purchases, issuances and settlements 181,553,655 Conversions to paid in capital (78,033,527 ) Extinguishment of convertible note (2,707,712 ) Change in fair value of warrant liabilities (93,608,200 ) Change in fair value of derivative liabilities (8,597,378 ) Balance at March 31, 2018 $ 70,730,100 The fair value of the derivative conversion features and warrant liabilities as of March 31, 2018 and December 31, 2017 were calculated using a Monte Carlo option model valued with the following weighted average assumptions: March 31, 2018 December 31, 2017 Amount Amount Dividend yield 0 % 0 % Expected volatility 140 % - 150 % 45 % - 270 % Risk free interest rate 1.50 % - 2.67 % 1.06 % - 2.20 % Contractual term (in years) 0.15 - 5.00 0.19 - 5.00 Exercise price $ 3.000 $ - $ 12.060 $ 0.001 - $ 14.310 Changes in the observable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable input (probability of a down round event) used in the fair value measurement is the estimation of the likelihood of the occurrence of a change in the contractual terms of the financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | 12. Stock Based Compensation The Company has a stock-based compensation plan, which is described as follows: On March 3, 2014, the Board of Directors approved and adopted the Helios and Matheson Analytics Inc. 2014 Equity Incentive Plan (the “2014 Plan”) which the Company’s stockholders approved at the annual stockholders meeting on May 5, 2014. The 2014 Plan as amended set aside and reserved 3,000,000 shares of the Company’s common stock for grant and issuance in accordance with its terms and conditions. Persons eligible to receive awards from the 2014 Plan include employees (including officers and directors) of the Company and its affiliates, consultants who provide significant services to the Company or its affiliates, and directors who are not employees of the Company or its affiliates (the “Participants”). The 2014 Plan permits the Company to issue to Participants qualified and/or non-qualified options to purchase the Company’s common stock, restricted common stock, performance units, and performance shares. The 2014 Plan will terminate on March 3, 2024. The Company’s Board of Directors is responsible for administration of the 2014 Plan and has the sole discretion to determine which Participants will be granted awards and the terms and conditions of the awards granted. The 2014 Plan also provides for an annual automatic increase in the number of shares of common stock authorized for issuance thereunder by the lesser of (A) 3,000,000 shares of the Company’s common stock or the equivalent of such number of shares after the administrator of the 2014 Plan, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction; (B) a number of shares of common stock equal to 5% of the Company’s common stock outstanding on January 2 nd As of March 31, 2018 there have not been any stock option grants made pursuant to the 2014 Plan. The shares historically issued both pursuant to the 2014 Plan and outside the 2014 Plan have been fully vested in certain cases and subject to vesting conditions in other cases; they generally contain resale or transfer restrictions pursuant to lock up agreements ranging from 18 to 24 months from the award date. The Company generally recognizes stock compensation expense on the grant date and over the period of vesting or period that services will be provided. Compensation associated with shares issued or to be issued to consultants and other non-employees is recognized over the expected service period beginning on the measurement date which is generally the time the Company and the service provider enter into a commitment whereby the Company agrees to grant shares in exchange for the services to be provided. MoviePass, Inc. MoviePass maintained the 2011 Equity Incentive Plan (the “2011 Plan”) during the three months ended March 31, 2018. The 2011 Plan provides for the grant of up to 95,000,000 shares of common stock for issuance as non-statutory or incentive stock options, stock appreciation rights, restricted stock and restricted stock units to the employees, officers, directors, or consultants of MoviePass. The 2011 Plan is administered by the Board of Directors of MoviePass, which selects the individuals to whom options will be granted, and determines the number of options to be granted and the term and exercise price of each option. Stock options granted pursuant to the terms of the 2011 Plan generally cannot be granted with an exercise price of less than 100% of the fair market value on the date of grant. The term of the options granted under the 2011 Plan cannot be greater than 10 years. Options vest at varying rates generally over three to five years along with performance-based options. For the three months ended March 31, 2018 MoviePass granted 39,809,175 stock options at an exercise price of $0.43 (43 cents) per share. The following table summarizes stock option activity under the MoviePass share-based plan for the three months ended March 31, 2018: Weighted Average Options for Remaining Aggregate Common Shares Exercise Price Contractual Term Intrinsic Value Outstanding as of December 31, 2017 28,396,428 $ 0.14 9.13 $ 8,313,684 Granted 39,809,175 $ 0.43 Exercised - - Forfeited, cancelled, expired - - Outstanding as of March 31, 2018 68,205,603 $ 0.31 9.44 $ 6,117,060 Vested and exercisable at March 31, 2018 16,249,800 0.13 8.91 3,556,413 The weighted average grant date fair value per share of stock options granted during the three months ended March 31, 2018 was $0.16. No options were exercised during the three months ended March 31, 2018 and March 31, 2017. The Company recognized share-based payment expense associated with stock options of $1,996,312 and $44,450 for the three months ended March 31, 2018 and March 31, 2017, respectively. The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees: Three Months Ended March 31, 2018 Risk-free interest rate 2.50 % Expected life of options – years 5.79 Expected stock price volatility 37.20 % Expected dividend yield 0.00 % There were no options granted to the Company’s board of directors or third parties during the three months ended March 31, 2018. |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2018 | |
Concentration of Credit Risk [Abstract] | |
Concentration of Credit Risk | 13. Concentration of Credit Risk Consulting For the three months ended March 31, 2018 and March 31, 2017, respectively, 4 customers accounted for 94.7% and 87.0% of consulting revenues. As of March 31, 2018 and December 31, 2017, respectively, 5 customers accounted for 90.5% and 4 customers accounted for 62.6% of consulting accounts receivables. As of March 31, 2018 and December 31, 2017, respectively, 5 vendors accounted for 98.4% and 3 vendors accounted for 82.7% of consulting accounts payables. Technology As of March 31, 2018 and December 31, 2017, respectively, 1 vendor accounted for 68.7% and 3 vendors accounted for 60.8% of technology accounts payables. Subscription and Marketing and Promotional Services As of March 31, 2018 and December 31, 2017, respectively, 3 customers accounted for 98.4% of subscription accounts receivables and 2 customers accounted for 100.0% for subscription accounts receivables. As of March 31, 2018 and December 31, 2017, respectively, 7 vendors accounted for 73.7% subscription accounts payables and 1 vendor accounted for 41.0% of subscription accounts payables. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 14. Commitments and Contingencies The Company’s operating lease commitments at March 31, 2018 are comprised of the following: Payments due by period Less than 1 year $ 295,730 1 to 3 years 532,933 3 to 5 years 289,988 Thereafter - Total $ 1,118,651 The Company’s executive office is located at the Empire State Building, 350 Fifth Avenue, Suite 7520, New York, New York 10118. The Company’s executive office is located in a leased facility with a term expiring on June 30, 2022. Zone rents two offices on a monthly basis through WeWork. The offices are located at 350 Lincoln Road, Miami Beach, Florida. In addition, the Company’s Indian subsidiary has an office in Bangalore, India at a leased facility located at 3rd Floor, Beta Block, Number 7 Sigma Tech Park, Varthur Kodi, Bangalore 560066. This lease was amended on September 26, 2017 to extend the duration of the lease until September 30, 2019. The Company’s executive office lease is subject to escalations based on increases in real estate taxes and operating expenses, all of which are charged to rent expense. The lease agreement expires in June 2022. Rent expense for the three months ended March 31, 2018 and 2017 was approximately $213,345 and $47,800, respectively. In April 2017, Zone signed a three-year lease agreement for office space in Miami. The lease term began in May 2017 and expires in April 2020 and requires a monthly rent payment of $5,026 for the first 12 months, $5,177 for the next 12 months, and $5,332 for the last 12 months of the lease. As of March 31, 2018, the Company does not have any “Off Balance Sheet Arrangements”. Legal Proceeding: On February 23, 2018, MoviePass filed a patent infringement complaint against Sinemia, Inc.in United States District Court, Central District of California. MoviePass’s complaint asserts infringement of two U.S. patents, U.S. Patent Nos. 8,484,133 (“Secure targeted personal buying/selling method and system”) and 8,612,325 (“Automatic authentication and funding method”) by Sinemia’s movie-ticket subscription service. MoviePass’s complaint requests damages and an injunction. As of the date of this report, Sinemia has not yet responded to the complaint due to an extension granted by MoviePass. The Company is party to routine litigation and administrative complaints incidental to its business. The Company does not believe that the resolution of any or all of such current routine litigation and administrative complaints is likely to have a material adverse effect on the Company’s financial condition or results of operations. There are no proceedings in which any of the directors, officers or affiliates of the Company, or any registered or beneficial holder of more than 5% of the Company’s voting securities, is an adverse party or has a material interest adverse to that of the Company. |
Transactions with Related Parti
Transactions with Related Parties | 3 Months Ended |
Mar. 31, 2018 | |
Transactions with Related Parties [Abstract] | |
Transactions with Related Parties | 15. Transactions with Related Parties Gadiyaram Consulting Agreement On October 5, 2017, the Company entered into a consulting agreement (the “Consulting Agreement”) with Mr. Muralikrishna Gadiyaram (the “Consultant”), a director of the Company, for a period of two years from the agreement date (the “Consulting Term”). The Consulting Agreement formalized on a compensatory basis the arrangement that was in place for performance without compensation by the Consultant of consulting services since the acquisition of Zone in November of 2016. Mr. Gadiyaram will continue to provide guidance to the Company and Zone relating to the further development of their respective businesses and technologies. In addition to the aforementioned services, if requested by the Company, Mr. Gadiyaram will provide guidance with respect to the development of any businesses or technologies that the Company or Zone may acquire during the Consulting Term, including, but not limited to, MoviePass. Pursuant to the Consulting Agreement, the Consultant will receive fees in the amount of $18,750 per month in cash. Such fees have been accrued and paid by the Company since January 1, 2017. Following the execution of the Consulting Agreement, the Company paid the consultant the accrued consulting fees for the period January 1, 2017 through November 30, 2017. The amount payable to Mr. Gadiyaram as of March 31, 2018 was approximately $18,750. |
Provision for Income Taxes
Provision for Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Provision for Income Taxes [Abstract] | |
Provision for Income Taxes | 16. Provision for Income Taxes The Company had a tax provision for the three months ended March 31, 2018 and 2017 of $7,951 and $30,484, respectively. Tax for both the three months ended March 31, 2018 and 2017 was comprised of minimum state taxes and a provision for tax within respect to taxes incurred by the Company’s Indian subsidiary. The Company’s provision for income taxes for the three months ended March 31, 2018 and 2017 is based on the estimated annual effective tax rate method prescribed by ASC 740-270, plus discrete items. The difference between the Company’s effective tax rates for the three months ended March 31, 2018 and 2017 and the US statutory tax rates of 21% and 35%, respectively, primarily relates to changes in the valuation allowances against deferred tax assets, non-deductible expenses, state income taxes (net of federal income tax benefit), the effect of taxes on foreign earnings, and changes to provisional amounts recorded for certain aspects of the Act. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that either some portion or the entire deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, tax-planning strategies, and available carry-back capacity in making this assessment, therefore, the Company has recorded a valuation allowance on its net domestic deferred tax assets, excluding deferred tax liabilities that are not expected to serve as a source of income for the recognition of deferred tax assets due to their indefinite reversal period (tax amortization of goodwill). As of March 31, 2018, the Company did not record any tax liabilities for uncertain income tax positions and concluded that all of its tax positions are either certain or are not material to the Company’s financial statements. The Company is currently not under audit in any jurisdiction in which it conducts business. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | 17. Segment Reporting Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision–making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision–making group is composed of the Chief Executive Officer and Chief Financial Officer. The Company operates in three segments, Consulting, Technology, and Subscription and Marketing and Promotional Services. During the three months ended March 31, 2018, the Company reported three segments. The Company evaluates performance of its operating segments based on revenue and operating loss. The following table summarizes the Company’s segment information for the following balance sheet dates presented, and for the three months ended March 31, 2018 and 2017: For the Three Months 2018 2017 Consulting Revenue $ 839,503 $ 1,358,062 Cost of revenue 711,194 1,105,485 Gross profit 128,309 252,577 Total operating expenses 8,417,912 3,313,547 Loss from operations (8,289,603 ) (3,060,970 ) Total other income/(expense) 81,710,691 (2,091,563 ) Provision for income taxes 4,176 (30,484 ) Total net income (loss) $ 73,425,264 $ (5,183,017 ) Technology Revenue $ - $ - Cost of revenue - - Gross profit - - Total operating expenses 1,133,448 1,297,550 Loss from operations (1,133,448 ) (1,297,550 ) Total other expense (16,972 ) (16,988 ) Provision for income taxes - - Total net loss $ (1,150,420 ) $ (1,314,538 ) Subscription and Marketing and Promotional Services Revenue $ 48,603,357 $ - Cost of revenue 135,257,782 - Gross loss (86,654,425 ) - Total operating expenses 11,654,517 - Loss from operations (98,308,942 ) - Total other income - - Provision for income taxes (12,127 ) - Total net loss $ (98,321,069 ) $ - As of As of March 31, December 31, Consulting Cash and cash equivalents $ 34,089,256 $ 569,886 Accounts receivable $ 280,988 $ 332,753 Prepaid expenses and other current assets $ 2,566,708 $ 3,382,127 Property and equipment $ 159,918 $ 96,464 Deposits and other assets $ 128,994 $ 129,119 Accounts payable and accrued expenses $ 2,977,315 $ 2,088,867 Liabilities to be settled in stock $ 9,957,166 $ 20,875,045 Convertible notes payable $ 641,206 $ 3,611,627 Warrant liability $ 70,030,200 $ 67,288,800 Derivative liability $ 699,900 $ 4,834,462 Technology Cash and cash equivalents $ 3,949,506 $ 21,933,765 Prepaid expenses and other current assets $ 38,333 $ 21,666 Property and equipment $ 91,512 $ 95,301 Intangible assets, net $ 2,468,186 $ 2,829,295 Deposits and other assets $ 10,052 $ 10,052 Accounts payable and accrued expenses $ 396,035 $ 607,622 Liabilities to be settled in stock $ 319,100 $ 445,660 Subscription and Marketing and Promotional Services Cash and cash equivalents $ 4,481,756 $ 2,445,742 Accounts receivable $ 24,151,228 $ 27,137,466 Prepaid expenses and other current assets $ 662,286 $ 154,018 Property and equipment $ 59,297 $ 42,270 Intangible assets, net $ 24,811,525 $ 25,707,487 Goodwill $ 79,137,177 $ 79,137,177 Deposits and other assets $ 8,000 $ 8,000 Accounts payable and accrued expenses $ 9,954,740 $ 10,447,514 Deferred revenue $ 84,887,136 $ 54,425,630 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events Asset Purchase Agreement On April 4, 2018, the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Oath Inc. (formerly, AOL Inc.), a Delaware corporation and subsidiary of Verizon Communications (“Oath”), pursuant to which the Company completed the acquisition from Oath of certain products, rights, technology, contracts, equipment, data and other assets related to the “Moviefone” brand (the “Moviefone Assets”). The purchase price for the transaction consisted of the following: (a) $1.0 million in cash, (b) the issuance of 2,550,154 shares of common stock of the Company, and (c) the issuance of warrants to purchase 2,550,154 shares of common stock of the Company at an exercise price of $5.50 per share. In addition, pursuant to the Purchase Agreement, the Company assumed certain specified liabilities related to the Moviefone Assets for periods beginning on or after the acquisition date. The Purchase Agreement contains customary representations, warranties, covenants, and indemnification provisions. In connection with the Purchase Agreement, the Company and Oath also entered into a Lock-up Agreement, Registration Rights Agreement, Transition Services Agreement and Advertising Representative Agreement (the “Representative Agreement”). Equity Distribution Agreement On April 18, 2018, the Company entered into an Equity Distribution Agreement with Canaccord Genuity LLC under which the Company may offer and sell shares of common stock having an aggregate offering price of up to $150,000,000 from time to time through Canaccord Genuity LLC, acting as sales agent. The Company intends to use the net proceeds of the offering to increase the Company’s ownership stake in MoviePass, a majority owned subsidiary of the Company, to support the operations of MoviePass or MoviePass Ventures, or to satisfy a portion or all of any amounts payable in connection with the convertible notes issued on November 7, 2017 and January 23, 2018, to the extent that they remain outstanding; and for general corporate purposes and transaction expenses. The proceeds may also be used for acquisitions. Underwriting Agreement On April 19, 2018, the Company entered into an underwriting agreement with Canaccord Genuity LLC, on behalf of itself and as representative of the underwriters named therein, pursuant to which the Company agreed to issue and sell to the Underwriters in a best-efforts underwritten public offering (the “Offering”) of up to approximately $30.0 million in gross proceeds of securities of the Company including (A) 10,500,000 Series A-2 units (the “Series A-2 Units”), with each Series A-2 Unit consisting of (i) one share of the Company’s common stock and (ii) one Series A-2 warrant to purchase one share of common stock (the “Series A-2 Warrants”); and for those purchasers whose purchase of Series A-2 Units would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 9.99% of the Company’s outstanding common stock following the consummation of the Offering, (B) 500,000 Series B-2 units (the “Series B-2 Units”, and together with the “Series A-2 Units”, the “Units”), consisting of (i) one pre-funded Series B-2 warrant to purchase one share of common stock (the “Series B-2 Warrants”, together with the Series A-2 Warrants, the “Warrants”) and (ii) one Series A-2 Warrant. The Units were sold at a price to the public equal to $2.75 per Unit. The Company received approximately $27.5 million in net proceeds from the sale of the Units, after deducting underwriting discounts and commissions equal to $1,663,750 and estimated offering expenses of $1,050,000, assuming no exercise of the Warrants. Following the closing of the Offering, all Series B-2 Warrants were exercised for an aggregate amount of $500. New Subscription Agreement with MoviePass From February 27, 2018 through April 12, 2018, the Company advanced a total of $35,000,000 to MoviePass (the “Second Advance”). On April 16, 2018, the Company entered into an additional Subscription Agreement with MoviePass (the “April 2018 Agreement”), pursuant to which, in lieu of repayment of the Second Advance, MoviePass agreed to sell to the Company an amount of shares of common stock of MoviePass equal to 10.6% of the total then outstanding MoviePass Common Stock (excluding shares underlying MoviePass options and warrants) (the “April 2018 MoviePass Purchased Shares”), based on a pre-money valuation of MoviePass of $295,525,000 as of March 31, 2018. Pursuant to the April 2018 Agreement, MoviePass also agreed to issue to the Company, in addition to the April 2018 MoviePass Purchased Shares, without payment of additional consideration by the Company, for purposes of anti-dilution, an amount of shares of common stock of MoviePass that caused the Company’s total ownership of the outstanding shares of common stock of MoviePass (excluding shares underlying MoviePass options and warrants), together with the April 2018 MoviePass Purchased Shares, to equal 91.8% as of April 12, 2018. MoviePass Ventures MoviePass Ventures aims to collaborate with film distributors to share in film revenues while using the data analytics MoviePass offers for marketing and targeting services reaching MoviePass’ paying subscribers using the platform. In April 2018, MoviePass Ventures entered into an Acquisition Co-Financing and Distribution Agreement with Orchard Enterprises NY, Inc. for the purpose of co-funding the acquisition, advertising and promotion of MoviePass Ventures’ first film, titled “American Animals,” which premiered at the 2018 Sundance Film Festival. In April 2018, MoviePass Ventures also entered into a Finance and Marketing Agreement with Georgia Film Fund 46, LLC (“GFF”) and Emmett Furla Oasis Films, LLC, a First Amendment to Amended and Restated Production Financing Agreement with GFF and Ronin Private Investments, LLC, and a First Amendment to Term Sheet with GFF and River Bay Films, LLC, for the purpose of co-financing and co-marketing the film titled “Gotti,” directed by Kevin Connolly and starring John Travolta, which will premiere at the 2018 Cannes Film Festival on May 15, 2018. Share Issuances Pursuant to Equity Distribution Agreement and November 2017 Investor Notes Beginning May 10, 2018 and through May 14, 2018, the Company has issued shares of common stock pursuant to its Equity Distribution Agreement with Canaccord Genuity LLC, and its November 2017 convertible notes following receipt of prepayments under the corresponding November 2017 investor notes. Accordingly, during the period from May 10, 2018 through May 14, 2018, the Company has issued approximately 18 million shares of its common stock and received gross cash proceeds of approximately $15.4 million with respect to common stock issued pursuant to the Equity Distribution Agreement. In addition, during the same period the Company received gross proceeds of approximately $5.9 million with respect to funding of the November 2017 investor notes and issued approximately 8.0 million shares with respect to the conversion of such funded notes, including 2.4 million shares related to the make whole interest provisions of such notes |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Consulting revenues are recognized as services are provided. The Company primarily provides consulting services under time and material contracts, whereby revenue is recognized as hours and costs are incurred. Clients for consulting revenues are billed on a weekly or monthly basis. Revenues from fixed fee contracts are recorded when work is performed on the basis of the proportionate performance method, which is based on costs incurred to date relative to total estimated costs. Any anticipated contract losses are estimated and accrued at the time they become known and estimable. Unbilled accounts receivables represent amounts recognized as revenue based on services performed in advance of customer billings. Revenue from sales of software licenses is recognized upon delivery of the software to a customer because future obligations associated with such revenue are insignificant. As of March 31, 2018, the Company owned approximately 81.2% of MoviePass. Subscription revenue consists primarily of subscription fees for monthly, quarterly, semi-annual or annual subscriptions. Revenue from subscriptions is recognized on a straight-line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services can be used by our subscribers at any time. Consumers purchasing subscriptions generally pay on an annual or monthly basis, and any prepaid amounts for subscription services are recorded as deferred revenue and amortized to revenue evenly over the service period which begins once a subscriber has activated his or her subscription. The Company also generates revenue from marketing services primarily related to major motion picture releases. Marketing revenue is generated through e mail and digital advertising to the Company’s subscriber base and pursuant to a contract for such services with the movie distributor. Such agreements are short term and are generally represented by a fully executed customer agreement. Revenue is recognized as performance obligations are satisfied which generally occurs within a month of the date the contract begins. Payment terms on marketing agreements vary and payment is generally due once the performance obligations have been satisfied. Adoption of ASC 606 Revenue from Contracts with Customers The Company adopted the new revenue standard, ASC 606, using the modified retrospective method with respect to all non-completed contracts as of January 1, 2018. This method required retrospective application of the new accounting standard to all unfulfilled contracts that were outstanding as of January 1, 2018. Revenues and contract assets and liabilities for contracts completed prior to January 1, 2018 are presented in accordance with ASC 606. The Company has determined that there were no adjustments required with respect to the adoption of ASC 606 with respect to any prior periods. Disaggregation of Revenue Three Months Ended 2018 2017 Types of revenues: Consulting $ 839,503 $ 1,358,062 Subscription 47,162,447 - Marketing and promotional services 1,440,910 - Total revenues $ 49,442,860 $ 1,358,062 The following is a description of the principal activities from which the Company generates revenue, including from subscribers and consulting customers. Consulting Revenue Consulting revenues are recognized as services are provided. The Company primarily provides consulting services under time and material contracts, whereby revenue is recognized as hours and costs are incurred. Clients for consulting revenues are billed on a weekly or monthly basis. Revenues from fixed fee contracts are recorded when work is performed on the basis of the proportionate performance method, which is based on costs incurred to date relative to total estimated costs. Any anticipated contract losses are estimated and accrued at the time they become known and estimable. Unbilled accounts receivables represent amounts recognized as revenue based on services performed in advance of customer billings. Revenue from sales of software licenses is recognized upon delivery of the software to a customer because future obligations associated with such revenue are insignificant. Subscription Revenue Subscription revenue consist of subscription fees related to monthly, quarterly, semi-annual and annual subscriptions to the MoviePass service. Once a subscriber activates his or her account, revenue is recognized on a straight-line basis when the performance obligation to provide each service for the period is satisfied, which is over time as our subscription service is continuously available to our subscribers. Marketing and Promotional Services Marketing and promotional services consists of services associated with the MoviePass business. The Company recognizes revenue from marketing contracts with customers when the performance obligations have been completed and the service has been provided to the customer. Deferred Revenue Subscription fees are generally paid in advance by credit card through merchant processors. Subscription fees received in advance of completion of the performance obligations are recorded as deferred revenue until such time the services are provided to the customer. |
Goodwill | Goodwill The Company reviews goodwill for impairment during the fourth quarter of each year, and also upon the occurrence of a triggering event. The Company performs reviews of each of its operating divisions that have goodwill balances. Generally, fair value is determined using a multiple of earnings, or discounted projected future cash flows, and is compared to the carrying value of a reporting unit for purposes of identifying potential impairment. Projected future cash flows are based on management’s knowledge of the current operating environment and expectations for the future. Goodwill impairment is recognized for any excess of the carrying value of the reporting unit’s goodwill over the fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of the general economic outlook, industry and market considerations, cost factors, overall financial performance, events which are specific to the Company, and trends in the market price of our common stock. Each factor is assessed to determine whether it impacts the impairment test as well as the magnitude of any such impact. For the three months ended March 31, 2018 and 2017, the Company did not record an impairment on goodwill. |
Intangible Assets, net | Intangible Assets, net Intangible assets consist of customer relationships, technology, trademarks, broker relationships and patents. Applicable long-lived assets are amortized or depreciated over the shorter of their estimated useful lives, the estimated period that the assets will generate revenue, or the statutory or contractual term in the case of patents. Estimates of useful lives and periods of expected revenue generation are reviewed periodically for appropriateness and are based upon management’s judgment. Intangible assets are amortized on the straight-line method over their useful lives ranging from 3 to 12 years. The Company recorded amortization expense of $1,255,859 and $426,651 for the three months ended March 31, 2018 and 2017, respectively. The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether certain triggering events have occurred. These events include current period losses or a projection of continuing losses or a significant decrease in the market value of an asset. When a triggering event occurs, an impairment calculation is performed, comparing projected undiscounted future cash flows, utilizing current cash flow information and expected growth rates, to the respective carrying value. If the Company identifies impairment for long-lived assets to be held and used, the Company compares the assets’ current carrying value to the assets’ fair value. Fair value is based on current market values or discounted future cash flows. The Company records impairment when the carrying value exceeds fair market value. With respect to owned property and equipment held for disposal, the value of the property and equipment is adjusted to reflect recoverable values based on previous efforts to dispose of similar assets and current economic conditions. Impairment is recognized for the excess of the carrying value over the estimated fair market value, reduced by estimated direct costs of disposal. The Company did not record impairment charges in regard to definite-lived intangible assets for the three months ended March 31, 2018 and 2017. |
Research and Development | Research and Development Research and development costs are charged to operations when incurred and are included in operating expenses. |
Stock Based Compensation | Stock Based Compensation The Company follows the fair value recognition provisions in ASC 718, Stock Compensation Equity |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurement and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. This topic also establishes a fair value hierarchy which requires classification based on observable and unobservable inputs when measuring fair value. There are three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted prices (unadjusted) in an active market for identical assets or liabilities. Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active. Level 3: Unobservable inputs that are supported by little or no market activity; therefore the inputs are developed by the Company using estimates and assumptions that the Company expects a market participant would use. The carrying value of the Company’s short-term investments, prepaid expenses and other current assets, accounts receivable, accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. The derivative liability in connection with the conversion feature of the Company’s convertible debt and the warrant liability is classified as a level 3 liability. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers ASU No. 2014-09 is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. The Company developed an implementation plan to adopt this new guidance, which included an assessment of the impact of the new guidance on the Company’s financial position and results of operations. On January 1, 2018, the Company adopted the new accounting standard ASC 606, Revenue from Contracts with Customers During January 2016, the FASB issued ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows Classification of Certain Cash Receipts and Cash Payments In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows Restricted Cash The following accounting standards updates were recently issued and have not yet been adopted by us. These standards are currently under review to determine their impact on our consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. In February 2016, the FASB issued ASU 2016-02, Leases, In October 2016, the FASB issued ASU 2016-16, Income Taxes Intra-Entity Transfers of Assets Other than Inventory In January 2017, the FASB issued ASU 2017-04 Intangibles-Goodwill and Other Simplifying the Accounting for Goodwill Impairment In July 2017, the FASB issued ASU 2017-11, Earnings Per Share Distinguishing Liabilities from Equity |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of disaggregation of revenue | Three Months Ended 2018 2017 Types of revenues: Consulting $ 839,503 $ 1,358,062 Subscription 47,162,447 - Marketing and promotional services 1,440,910 - Total revenues $ 49,442,860 $ 1,358,062 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Acquisitions [Abstract] | |
Schedule of fair values of assets acquired and liabilities assumed | Purchase consideration: MoviePass Cash $ 32,671,792 Notes payable (includes Helios Convertible Note and Helios Note) 39,152,446 Fair value of consideration transferred $ 71,824,238 Recognized amounts of identifiable assets and liabilities acquired: Cash acquired $ 1,106,171 Accounts receivable 9,669,390 Notes receivable 39,152,446 Investment option payment receivable 7,850,000 Prepaid expenses and other current assets 192,180 Property and equipment 39,320 Other assets 8,000 Identifiable intangible assets: Tradenames and trademarks 19,550,000 Technology 3,800,000 Customer relationships 2,560,000 Liabilities assumed (9,261,785 ) Deferred revenue (38,718,397 ) Non-controlling interest (43,260,264 ) Goodwill 79,137,177 Total purchase price allocation $ 71,824,238 |
Net Income_(Loss) Per Share A28
Net Income/(Loss) Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Net Income/(Loss) Per Share Attributable to Common Stockholders [Abstract] | |
Schedule of outstanding dilutive common shares excluded from the diluted net loss per share calculation | Three months ended March 31, 2018 Net Income Available to Common Stockholders (Numerator) Shares (Denominator) Per Share Amount Basic EPS $ 5,175,875 34,850,281 $ 0.15 Assumed conversion of convertible notes (1,940,056 ) - - Dilutive shares related to warrants and convertible notes - 1,752,086 - Dilutive EPS $ 3,235,819 36,602,367 $ 0.09 Three months ended March 31, 2017 Net Loss Available to Common Stockholders (Numerator) Shares (Denominator) Per Share Amount Basic EPS $ (6,496,732 ) 5,530,083 $ (1.17 ) Dilutive shares related to warrants and convertible notes - - - Dilutive EPS $ (6,496,732 ) 5,530,083 $ (1.17 ) |
Prepaid Expenses and Other Cu29
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of prepaid expenses and other current assets | March 31, December 31, 2017 Vendor deposits $ 152,285 $ 147,533 Tax 99,407 108,433 Deposits 226,750 230,711 Insurance 78,797 86,181 Professional fees and services 549,140 33,333 Deferred stock compensation 2,054,341 2,885,278 Rent 42,779 52,650 Other 63,828 13,692 Total prepaid expenses and other current assets $ 3,267,327 $ 3,557,811 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets, net [Abstract] | |
Schedule of intangibles assets | Estimated Gross March 31, 2018 Useful Life (Years) Carrying Amount Accumulated Amortization Impairments Net Book Value Customer relationships 7 $ 2,560,000 $ (112,074 ) $ - $ 2,447,926 Technology 3 8,070,000 (2,373,259 ) - 5,696,741 Tradenames and trademarks 7 19,550,000 (599,113 ) - 18,950,887 Patents 12 196,353 (12,196 ) - 184,157 $ 30,376,353 $ (3,096,642 ) $ - $ 27,279,711 |
Schedule of estimated future annual amortization expense | Estimated Gross December 31, 2017 Useful Life (Years) Carrying Amount Acquisitions Accumulated Amortization Impairments Net Book Value Customer relationships 7 $ - $ 2,560,000 $ (20,645 ) $ - $ 2,539,355 Technology 3 4,270,000 3,800,000 (1,700,431 ) - 6,369,569 Tradenames and trademarks 7 1,977,000 19,550,000 (433,588 ) (1,653,776 ) 19,439,636 Broker relationships 5 4,200 - (962 ) (3,238 ) - Patents 12 196,353 - (8,131 ) - 188,222 $ 6,447,553 $ 25,910,000 $ (2,163,757 ) $ (1,657,014 ) $ 28,536,782 |
Schedule of goodwill carrying value | March 31, Remaining 2018 $ 3,770,233 2019 4,821,384 2020 3,532,137 2021 2,336,976 2022 2,336,976 Thereafter 10,482,005 $ 27,279,711 |
Accounts Payable and Accrued 31
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of accounts payable and accrued expenses | March 31, December 31, 2017 Accounts payable $ 5,412,887 $ 5,087,060 Accrued ticket expense 1,852,876 4,743,582 Accrued professional fees 2,719,192 597,187 Accrued credit card fees - 782,670 Accrued payroll expense 1,079,841 312,149 Accrued other expense 869,818 852,840 Accrued interest 1,393,476 768,515 Total accounts payable and accrued expenses $ 13,328,090 $ 13,144,003 |
Senior Secured Convertible No32
Senior Secured Convertible Notes and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Senior Secured Convertible Notes and Warrants [Abstract] | |
Schedule of senior secured convertible notes | March 31, 2018 December 31, 2017 August 2017 Notes $ - $ 2,061,072 November 2017 Notes 641,206 1,550,555 $ 641,206 $ 3,611,627 |
Schedule of carrying value of the senior secured convertible notes | March 31, 2018 December 31, 2017 August 2017 Notes $ - $ 4,505,440 November 2017 Notes 695,270 2,943,069 Unamortized discounts (54,064 ) (3,836,882 ) $ 641,206 $ 3,611,627 |
Schedule of warrant activity | Warrant Shares Weighted Average Exercise Price Weighted Outstanding/exercisable – December 31, 2017 9,631,588 $ 6.04 4.86 Granted 30,949,826 6.15 4.88 Exercised (10,860,000 ) 5.51 4.88 Outstanding/exercisable – March 31, 2018 29,721,414 $ 5.99 4.88 |
Fair Value of Financial Asset33
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis [Abstract] | |
Summary of financial assets and liabilities measured at fair value on a recurring basis | Amount at Fair Value Measurement Using Fair Value Level 1 Level 2 Level 3 March 31, 2018 Liabilities Derivative liability – warrants $ 70,030,200 $ - $ - $ 70,030,200 Derivative liability – conversion feature 699,900 - - 699,900 Total $ 70,730,100 $ - $ - $ 70,730,100 December 31, 2017 Liabilities Derivative liability – warrants $ 67,288,800 $ - $ - $ 67,288,800 Derivative liability – conversion feature 4,834,462 - - 4,834,462 Total $ 72,123,262 $ - $ - $ 72,123,262 |
Summary of the changes in fair value | Amount Balance at December 31, 2017 $ 72,123,262 Purchases, issuances and settlements 181,553,655 Conversions to paid in capital (78,033,527 ) Extinguishment of convertible note (2,707,712 ) Change in fair value of warrant liabilities (93,608,200 ) Change in fair value of derivative liabilities (8,597,378 ) Balance at March 31, 2018 $ 70,730,100 |
Schedule of fair value of the derivative conversion features and warrant liabilities | March 31, 2018 December 31, 2017 Amount Amount Dividend yield 0 % 0 % Expected volatility 140 % - 150 % 45 % - 270 % Risk free interest rate 1.50 % - 2.67 % 1.06 % - 2.20 % Contractual term (in years) 0.15 - 5.00 0.19 - 5.00 Exercise price $ 3.000 $ - $ 12.060 $ 0.001 - $ 14.310 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock Based Compensation [Abstract] | |
Schedule of stock based compensation activity | Weighted Average Options for Remaining Aggregate Common Shares Exercise Price Contractual Term Intrinsic Value Outstanding as of December 31, 2017 28,396,428 $ 0.14 9.13 $ 8,313,684 Granted 39,809,175 $ 0.43 Exercised - - Forfeited, cancelled, expired - - Outstanding as of March 31, 2018 68,205,603 $ 0.31 9.44 $ 6,117,060 Vested and exercisable at March 31, 2018 16,249,800 0.13 8.91 3,556,413 |
Summarizes the weighted-average assumptions used to compute the fair value of options granted | Three Months Ended March 31, 2018 Risk-free interest rate 2.50 % Expected life of options – years 5.79 Expected stock price volatility 37.20 % Expected dividend yield 0.00 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of operating lease commitments | Payments due by period Less than 1 year $ 295,730 1 to 3 years 532,933 3 to 5 years 289,988 Thereafter - Total $ 1,118,651 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | For the Three Months 2018 2017 Consulting Revenue $ 839,503 $ 1,358,062 Cost of revenue 711,194 1,105,485 Gross profit 128,309 252,577 Total operating expenses 8,417,912 3,313,547 Loss from operations (8,289,603 ) (3,060,970 ) Total other income/(expense) 81,710,691 (2,091,563 ) Provision for income taxes 4,176 (30,484 ) Total net income (loss) $ 73,425,264 $ (5,183,017 ) Technology Revenue $ - $ - Cost of revenue - - Gross profit - - Total operating expenses 1,133,448 1,297,550 Loss from operations (1,133,448 ) (1,297,550 ) Total other expense (16,972 ) (16,988 ) Provision for income taxes - - Total net loss $ (1,150,420 ) $ (1,314,538 ) Subscription and Marketing and Promotional Services Revenue $ 48,603,357 $ - Cost of revenue 135,257,782 - Gross loss (86,654,425 ) - Total operating expenses 11,654,517 - Loss from operations (98,308,942 ) - Total other income - - Provision for income taxes (12,127 ) - Total net loss $ (98,321,069 ) $ - As of As of March 31, December 31, Consulting Cash and cash equivalents $ 34,089,256 $ 569,886 Accounts receivable $ 280,988 $ 332,753 Prepaid expenses and other current assets $ 2,566,708 $ 3,382,127 Property and equipment $ 159,918 $ 96,464 Deposits and other assets $ 128,994 $ 129,119 Accounts payable and accrued expenses $ 2,977,315 $ 2,088,867 Liabilities to be settled in stock $ 9,957,166 $ 20,875,045 Convertible notes payable $ 641,206 $ 3,611,627 Warrant liability $ 70,030,200 $ 67,288,800 Derivative liability $ 699,900 $ 4,834,462 Technology Cash and cash equivalents $ 3,949,506 $ 21,933,765 Prepaid expenses and other current assets $ 38,333 $ 21,666 Property and equipment $ 91,512 $ 95,301 Intangible assets, net $ 2,468,186 $ 2,829,295 Deposits and other assets $ 10,052 $ 10,052 Accounts payable and accrued expenses $ 396,035 $ 607,622 Liabilities to be settled in stock $ 319,100 $ 445,660 Subscription and Marketing and Promotional Services Cash and cash equivalents $ 4,481,756 $ 2,445,742 Accounts receivable $ 24,151,228 $ 27,137,466 Prepaid expenses and other current assets $ 662,286 $ 154,018 Property and equipment $ 59,297 $ 42,270 Intangible assets, net $ 24,811,525 $ 25,707,487 Goodwill $ 79,137,177 $ 79,137,177 Deposits and other assets $ 8,000 $ 8,000 Accounts payable and accrued expenses $ 9,954,740 $ 10,447,514 Deferred revenue $ 84,887,136 $ 54,425,630 |
Business and Basis of Present37
Business and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Business and Basis of Presentation (Textual) | |
Description of consolidation of entities | The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. |
Summary of Significant Accoun38
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Types of revenues: | ||
Consulting | $ 839,503 | $ 1,358,062 |
Subscription | 47,162,447 | |
Marketing and promotional services | 1,440,910 | |
Total revenues | $ 49,442,860 | $ 1,358,062 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||
Amortization expense | $ 1,255,859 | $ 426,651 |
Maximum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Intangible assets useful lives range | 12 years | |
Minimum [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Intangible assets useful lives range | 3 years | |
Movie Pass Acquisition [Member] | ||
Summary of Significant Accounting Policies (Textual) | ||
Ownership percentage | 81.20% |
Going Concern Analysis (Details
Going Concern Analysis (Details) - USD ($) | Jan. 11, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Jan. 23, 2018 | Dec. 31, 2017 | Nov. 07, 2017 | Dec. 31, 2016 |
Going Concern Analysis (Textual) | |||||||
Accumulated deficit | $ (184,319,310) | $ (189,495,185) | |||||
Net cash used in operating activities | (68,409,239) | $ (2,492,785) | |||||
Cash | 42,520,518 | 3,235,423 | 24,949,393 | $ 2,747,240 | |||
Working capital deficit | 109,001,531 | ||||||
Warrant and derivative liabilities | 70,730,100 | $ 72,123,262 | |||||
Secured financing | $ 60,000,000 | 25,000,000 | |||||
Ownership interests, description | (i) to increase the Company's ownership interests or other rights and interests in MoviePass; (ii) to satisfy certain indebtedness; and (iii) for general corporate purposes and transaction expenses. The Company may also use the proceeds to make other acquisitions. As of March 31, 2018, the Company had no unrestricted principle outstanding under the Senior Convertible Notes issued to institutional investors on November 7, 2017 and January 23, 2018, and there remained $114,350,000 in restricted principal for which a corresponding amount of principal under the investor notes remains to be paid to the Company by the holders of those convertible notes. In order to facilitate the Company's further access to capital, in January 2018 the Company filed a shelf registration statement on form S-3 that was declared effective by the Securities and Exchange Commission on February 9, 2018, which allows the Company to offer and sell up to $400,000,000 of its equity or equity-linked securities. This aggregate offering amount includes up to $150 million of common stock that the Company may sell at prevailing market prices in a continuous at-the market offering through its sales agent Canaccord Genuity LLC. Using the shelf registration statement, the Company completed an underwritten public offering of common stock and warrants for gross proceeds of approximately $105.0 million on February 13, 2018. | ||||||
Total net proceeds from the public offering | 96,900,000 | ||||||
Loss from operations | $ (107,731,993) | $ (4,358,520) | |||||
Principal amount | $ 114,350,000 | $ 695,270 |
Acquisitions (Details)
Acquisitions (Details) - MoviePass [Member] | Mar. 31, 2018USD ($) |
Purchase consideration: | |
Cash | $ 32,671,792 |
Notes payable (includes Helios Convertible Note and Helios Note) | 39,152,446 |
Fair value of consideration transferred | 71,824,238 |
Recognized amounts of identifiable assets and liabilities acquired: | |
Cash acquired | 1,106,171 |
Accounts receivable | 9,669,390 |
Notes receivable | 39,152,446 |
Investment option payment receivable | 7,850,000 |
Prepaid expenses and other current assets | 192,180 |
Property and equipment | 39,320 |
Other assets | 8,000 |
Identifiable intangible assets: | |
Tradenames and trademarks | 19,550,000 |
Technology | 3,800,000 |
Customer relationships | 2,560,000 |
Liabilities assumed | (9,261,785) |
Deferred revenue | (38,718,397) |
Non-controlling interest | (43,260,264) |
Goodwill | 79,137,177 |
Total purchase price allocation | $ 71,824,238 |
Acquisitions (Details Textual)
Acquisitions (Details Textual) - USD ($) | Mar. 08, 2018 | Dec. 11, 2017 | Mar. 31, 2018 |
Acquisitions (Textual) | |||
MoviePass acquisition, consideration, description | (1) a subordinated convertible promissory note in the principal amount of $12,000,000 (the "Helios Convertible Note"), which is convertible into shares of HMNY's common stock, as further described below; (2) a $5,000,000 promissory note issued to MoviePass (the "Helios Note"); (3) the exchange of a convertible promissory note issued by MoviePass to HMNY in an aggregate principal amount of $11,500,000 (plus accrued interest thereon); (4) $1,000,000 in cash, which was converted into shares of MoviePass' common stock amounting to an additional 2% of the outstanding shares of MoviePass common stock; and (5) $20,000,000 in cash pursuant to the MoviePass Option Agreement. | ||
Repayments of convertible debt | $ 666,667 | ||
Unregistered common stock shares | 4,000,000 | ||
Cash | $ 1,000,000 | ||
Non-controlling interest | $ 43,260,264 | ||
Maximum [Member] | |||
Acquisitions (Textual) | |||
Estimated useful life (Years) | 12 years | ||
Minimum [Member] | |||
Acquisitions (Textual) | |||
Estimated useful life (Years) | 3 years | ||
Tradenames and trademarks [Member] | |||
Acquisitions (Textual) | |||
Estimated useful life (Years) | 7 years | ||
Customer relationships [Member] | |||
Acquisitions (Textual) | |||
Estimated useful life (Years) | 7 years | ||
Technology [Member] | |||
Acquisitions (Textual) | |||
Estimated useful life (Years) | 3 years | ||
Kelly Note Purchase Agreement [Member] | |||
Acquisitions (Textual) | |||
Principal amount | $ 1,000,000 | ||
Percentage of additional shares outstanding | 2.00% | ||
Moviepass Option Note [Member] | |||
Acquisitions (Textual) | |||
Percentage of additional shares outstanding | 62.41% | ||
Cash | $ 20,000,000 | ||
Controlling interest percentage | 62.41% | ||
Percentage of purchased shares | 81.20% | ||
Cash advances to MoviePass | $ 55,525,000 | ||
Percentage of common stock total outstanding shares | 18.79% | ||
Helios Convertible Note [Member] | |||
Acquisitions (Textual) | |||
Additional payment amount value | $ 29,000,000 | ||
Forfeiture provision value | $ 5,152,446 | ||
Royalty rate description | The significant assumptions used in certain valuations associated with the MoviePass Transaction include discount rates ranging from 10.0% to 51.0%. In determining the value of tradenames and trademarks the Company observed royalty rates ranging from 0.0% to 100.0%, and utilized a 1.0% rate for MoviePass's aggregated tradenames and trademarks. Additionally, the Company observed royalty rates related to MoviePass's technology assets acquired ranging from 0.0% to 50.0%, and used a 1.0% royalty rate in determining the fair value of the acquired technology. |
Net Income_(Loss) Per Share A43
Net Income/(Loss) Per Share Attributable to Common Stockholders (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Income/(Loss) Per Share Attributable to Common Stockholders [Abstract] | ||
Net Income Available to Common Stockholders (Numerator), Basic EPS | $ 5,175,875 | $ (6,497,555) |
Net Income Available to Common Stockholders (Numerator), Assumed conversion of convertible notes | (1,940,056) | |
Net Income Available to Common Stockholders (Numerator), Dilutive EPS | $ 3,235,819 | $ (6,496,732) |
Per Share Amount, Basic EPS | $ 0.15 | $ (1.17) |
Per Share Amount, Dilutive EPS | $ 0.09 | $ (1.17) |
Shares (Denominator), Basic EPS | 34,850,281 | 5,530,083 |
Shares (Denominator), Dilutive shares related to warrants and convertible notes | 1,752,086 | |
Shares (Denominator), Basic EPS | 36,602,367 | 5,530,083 |
Net Income_(Loss) Per Share A44
Net Income/(Loss) Per Share Attributable to Common Stockholders (Details Textual) | 3 Months Ended |
Mar. 31, 2018shares | |
Net Income Loss Per Share Attributable To Common Stockholders Textual [Abstract] | |
Diluted EPS, shares | 4,934,555 |
Prepaid Expenses and Other Cu45
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Vendor deposits | $ 152,285 | $ 147,533 |
Tax | 99,407 | 108,433 |
Deposits | 226,750 | 230,711 |
Insurance | 78,797 | 86,181 |
Professional fees and services | 549,140 | 33,333 |
Deferred stock compensation | 2,054,341 | 2,885,278 |
Rent | 42,779 | 52,650 |
Other | 63,828 | 13,692 |
Total prepaid expenses and other current assets | $ 3,267,327 | $ 3,557,811 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 30,376,353 | $ 6,447,553 |
Acquisitions | 25,910,000 | |
Accumulated Amortization | (3,096,642) | (2,163,757) |
Impairments | (1,657,014) | |
Net Book Value | $ 27,279,711 | $ 28,536,782 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (Years) | 7 years | 7 years |
Gross Carrying Amount | $ 2,560,000 | |
Acquisitions | 2,560,000 | |
Accumulated Amortization | (112,074) | (20,645) |
Impairments | ||
Net Book Value | $ 2,447,926 | $ 2,539,355 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (Years) | 3 years | 3 years |
Gross Carrying Amount | $ 8,070,000 | $ 4,270,000 |
Acquisitions | 3,800,000 | |
Accumulated Amortization | (2,373,259) | (1,700,431) |
Impairments | ||
Net Book Value | $ 5,696,741 | $ 6,369,569 |
Tradenames and trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (Years) | 7 years | 7 years |
Gross Carrying Amount | $ 19,550,000 | $ 1,977,000 |
Acquisitions | 19,550,000 | |
Accumulated Amortization | (599,113) | (433,588) |
Impairments | (1,653,776) | |
Net Book Value | $ 18,950,887 | $ 19,439,636 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (Years) | 12 years | 12 years |
Gross Carrying Amount | $ 196,353 | $ 196,353 |
Acquisitions | ||
Accumulated Amortization | (12,196) | (8,131) |
Impairments | ||
Net Book Value | $ 184,157 | $ 188,222 |
Broker relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful life (Years) | 5 years | |
Gross Carrying Amount | $ 4,200 | |
Acquisitions | ||
Accumulated Amortization | (962) | |
Impairments | (3,238) | |
Net Book Value |
Intangible Assets, net (Detai47
Intangible Assets, net (Details 1) | Mar. 31, 2018USD ($) |
Intangible Assets, net [Abstract] | |
Remaining 2,018 | $ 3,770,233 |
2,019 | 4,821,384 |
2,020 | 3,532,137 |
2,021 | 2,336,976 |
2,022 | 2,336,976 |
Thereafter | 10,482,005 |
Total | $ 27,279,711 |
Intangible Assets, net (Detai48
Intangible Assets, net (Details 2) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Intangible Assets, net [Abstract] | |
Balance as of December 31, 2017 | $ 79,137,177 |
Goodwill activity for the three months ended March 31, 2018 | |
Balance as of March 31, 2018 | $ 79,137,177 |
IntanIntangible Assets, net (De
IntanIntangible Assets, net (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Intangible Assets, Net and Goodwill (Textual) | ||
Amortization expense | $ 1,255,859 | $ 426,651 |
Accounts Payable and Accrued 50
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Expenses [Abstract] | ||
Accounts payable | $ 5,412,887 | $ 5,087,060 |
Accrued ticket expense | 1,852,876 | 4,743,582 |
Accrued professional fees | 2,719,192 | 597,187 |
Accrued credit card fees | 782,670 | |
Accrued payroll expense | 1,079,841 | 312,149 |
Accrued other expense | 869,818 | 852,840 |
Accrued interest | 1,393,476 | 768,515 |
Total accounts payable and accrued expenses | $ 13,328,090 | $ 13,144,003 |
Senior Secured Convertible No51
Senior Secured Convertible Notes and Warrants (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Senior secured convertible notes | $ 641,206 | $ 3,611,627 |
August 2017 Notes [Member] | ||
Short-term Debt [Line Items] | ||
Senior secured convertible notes | 2,061,072 | |
November 2017 Notes [Member] | ||
Short-term Debt [Line Items] | ||
Senior secured convertible notes | $ 641,206 | $ 1,550,555 |
Senior Secured Convertible No52
Senior Secured Convertible Notes and Warrants (Details 1) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Unamortized discounts | $ (54,064) | $ (3,836,882) |
Carrying value of senior secured convertible notes | 641,206 | 3,611,627 |
August 2017 Notes [Member] | ||
Short-term Debt [Line Items] | ||
Carrying value of senior secured convertible notes | 4,505,440 | |
November 2017 Notes [Member] | ||
Short-term Debt [Line Items] | ||
Carrying value of senior secured convertible notes | $ 695,270 | $ 2,943,069 |
Senior Secured Convertible No53
Senior Secured Convertible Notes and Warrants (Details Textual) | Dec. 02, 2017 | Nov. 07, 2017 | Oct. 23, 2017USD ($)shares | Feb. 08, 2017USD ($)ConvertibleNotesshares | Feb. 20, 2018USD ($)shares | Feb. 13, 2018$ / shares | Jan. 23, 2018USD ($) | Jan. 03, 2018USD ($) | Nov. 21, 2017$ / sharesshares | Aug. 16, 2017USD ($)ConvertibleNotes$ / sharesshares | Feb. 28, 2017USD ($) | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016shares | Jan. 26, 2018USD ($) | Aug. 15, 2017USD ($) |
Securities Purchase Agreement (Textual) | |||||||||||||||||
Cash payment | $ 35,000,000 | ||||||||||||||||
Investor converted total | $ 2,500,000 | ||||||||||||||||
New note shares of common stock | shares | 552,782 | ||||||||||||||||
Warrant [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Common stock nominal exercise price | $ / shares | $ 0.001 | ||||||||||||||||
Net proceeds from the sale of units | $ 96,923,231 | ||||||||||||||||
Underwriting discounts and commissions | 5,882,800 | ||||||||||||||||
Offering expenses | 450,000 | ||||||||||||||||
Underwriting Agreement [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Description of notes conversion agreement | The Company entered into an underwriting agreement (the “Underwriting Agreement”) with Canaccord Genuity Inc., on behalf of itself and as representative of the underwriters named therein (the “Underwriters”), pursuant to which the Company agreed to issue and sell to the Underwriters in a best-efforts underwritten public offering (the “Offering”) of up to approximately $105 million in gross proceeds of securities of the Company including (A) 7,425,000 Series A-1 units (the “Series A-1 Units”), with each Series A-1 Unit consisting of (i) one share (the “Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”), and (ii) one Series A-1 warrant to purchase one share of Common Stock (the “Series A-1 Warrants”); and for those purchasers whose purchase of Series A-1 Units would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 9.99% of the Company’s outstanding Common Stock following the consummation of the Offering, (B) 11,675,000 Series B-1 units (the “Series B-1 Units”, and together with the “Series A-1 Units”, the “Units”), consisting of (i) one pre-funded Series B-1 warrant to purchase one share of Common Stock (the “Series B-1 Warrants”, and together with the Series A-1 Warrants, the “Warrants”) and (ii) one Series A-1 Warrant. The Units were sold at a price to the public equal to $5.50 per Unit. | ||||||||||||||||
September Notes [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Interest expenses | $ 0 | $ 1,217 | |||||||||||||||
Notes, maturity date | Dec. 7, 2017 | ||||||||||||||||
September Notes [Member] | Placement Agent Notes and Warrants [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Interest expenses | |||||||||||||||||
Warrant term | 5 years | ||||||||||||||||
Description of convertible debt | Through the first nine months of 2017, the Company received $5,000,000 of cash payments for the February 2017 Notes. | ||||||||||||||||
December Notes [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Interest expenses | 84,293 | ||||||||||||||||
Common stock issued upon convertible notes | shares | 232,334 | ||||||||||||||||
December Notes [Member] | Placement Agent Notes and Warrants [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Warrant term | 5 years | ||||||||||||||||
February 2017 Notes [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Number of instruments issued | ConvertibleNotes | 2 | ||||||||||||||||
Principal amount | $ 5,681,818 | ||||||||||||||||
Interest percentage | 6.00% | ||||||||||||||||
Interest expenses | $ 0 | $ 10,277 | |||||||||||||||
Notes, maturity date | Oct. 8, 2017 | ||||||||||||||||
Maturity date, description | The maturity date of any New Note was 45 days following the issuance of the New Note, and the conversion price of the New Notes was $4.50, or, at the election of the Investor, the Investor could convert at the Alternate Conversion Price. The Alternate Conversion Price was defined as either (A) the lower of (i) $4.50 and (ii) the greater of (I) $4.00 and (II) 85% of the quotient of (x) the sum of the volume weighted average price of the common stock for each of the 5 consecutive trading days ending on the trading day immediately preceding the delivery of the Conversion Notice, divided by (y) 5 or (B) that price which shall be the lowest of (i) $3.00 and (ii) the greater of (I) the Floor Price then in effect and (II) 85% of the quotient of (x) the sum of the volume weighted average price of the Company's common stock for each of the 5 consecutive trading days ending and including the date of the alternate conversion, divided by (y) 5. | ||||||||||||||||
Common stock issued upon convertible notes | shares | 1,852,886 | ||||||||||||||||
Floor price variances | The Floor Price was defined as $3.00 through October 4, 2017 and $0.50 following October 4, 2017. | ||||||||||||||||
Principal amount | $ 681,818 | ||||||||||||||||
Interest amount of common stock | 49,000 | ||||||||||||||||
February 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Interest percentage | 8.00% | ||||||||||||||||
Warrants issued to purchase common stock | shares | 133,334 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 3 | ||||||||||||||||
Warrant term | 5 years | ||||||||||||||||
August 2017 Notes [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Number of instruments issued | ConvertibleNotes | 3 | ||||||||||||||||
Principal amount | $ 10,300,000 | ||||||||||||||||
Interest percentage | 6.00% | ||||||||||||||||
Notes, maturity date | Apr. 16, 2018 | ||||||||||||||||
Principal amount | $ 8,800,000 | ||||||||||||||||
Description of convertible debt | Additional Series A Note and the Series B Note, were $4.00 for the Initial Series A Note and the Additional Series A Note and $3.00 for the Series B Note. | ||||||||||||||||
August 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Consideration received in cash for convertible note | $ 8,800,000 | ||||||||||||||||
Principal amount | $ 9,050,000 | ||||||||||||||||
Interest percentage | 8.00% | ||||||||||||||||
Warrants issued to purchase common stock | shares | 176,000 | ||||||||||||||||
Warrant term | 5 years | ||||||||||||||||
August 2017 Notes [Member] | Minimum [Member] | Placement Agent Notes and Warrants [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Common stock at exercise prices | $ / shares | $ 3 | ||||||||||||||||
August 2017 Notes [Member] | Maximum [Member] | Placement Agent Notes and Warrants [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Common stock at exercise prices | $ / shares | $ 14.27 | ||||||||||||||||
Investor Note [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Principal amount | 60,000,000 | $ 2,894,062 | |||||||||||||||
Interest percentage | 6.00% | ||||||||||||||||
Warrants issued to purchase common stock | shares | 4,353,581 | ||||||||||||||||
Cash payment | 25,000,000 | $ 779,208 | |||||||||||||||
Common stock issued upon convertible notes | shares | 83,306 | 804,401 | |||||||||||||||
February 2017 Investor Note [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Description of notes conversion agreement | To effect an exchange (the "Share Exchange") of 841,250 shares of the Company's common stock (the "Exchange Shares") for one or more senior secured convertible promissory notes in the form of the February Additional Note (the "New Note"), with the right to substitute the alternate conversion price of the New Note with the alternate conversion price of the Company's Series B Senior Secured Convertible Note (the "Series B Note") that was issued on August 16, 2017. Any New Note issued would be in the principal amount equal to the product of the prepayment amount ($2,500,000) multiplied by a fraction, the numerator of which was the number of the aggregate shares being tendered to the Company in the Share Exchange and the denominator of which is 841,250. | ||||||||||||||||
Investor Warrant [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Consideration received in cash for convertible note | $ 220,000 | ||||||||||||||||
Principal amount | $ 697,000 | ||||||||||||||||
Warrants issued to purchase common stock | shares | 10,000 | 1,892,972 | 1,715,006 | ||||||||||||||
Interest expenses | $ 12,878,864 | ||||||||||||||||
Warrants value | $ 977,142 | ||||||||||||||||
Investor additional shares of common stock | shares | 325,714 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 14.31 | $ 3.25 | $ 3.25 | ||||||||||||||
Warrant expiration date | Nov. 21, 2022 | Apr. 16, 2022 | |||||||||||||||
Warrant expiration term | 5 years | ||||||||||||||||
Convertible debt contract description | The $220,000 secured promissory note payable by the Investor was issued in exchange for a $250,000 Senior Secured Convertible Note, therefore a discount of $30,000 was recognized upon issuance and accreted into interest expense over the life of the note using the effective interest method. Upon issuance, the Investor Warrants were recorded at fair value and accounted for as an original issuance discount to the August 2017 Notes. | ||||||||||||||||
Investor Warrant [Member] | Minimum [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Warrants issued to purchase common stock | shares | 1,892,972 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 3 | ||||||||||||||||
Investor Warrant [Member] | Maximum [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Warrants issued to purchase common stock | shares | 2,050,720 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 3.25 | ||||||||||||||||
November 2017 Notes [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Principal amount | $ 100,000,000 | ||||||||||||||||
Interest expenses | $ 1,394,169 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 18.1 | ||||||||||||||||
Notes, maturity date | Nov. 7, 2019 | ||||||||||||||||
Common stock issued upon convertible notes | shares | 3,265,186 | ||||||||||||||||
Description of convertible debt | The November Notes consist of a Senior Secured Convertible Note in the amount of $5,000,000 (the "November Initial Note") and a Senior Secured Convertible Note in the amount of $95,000,000 (the "November Additional Note") in exchange for an upfront cash payment of $5,000,000 and a senior secured promissory note of $95,000,000 (the "November 2017 Investor Note"). As of December 31, 2017, purchasers of the November 2017 Notes prepaid $15,650,000 of the November 2017 Investor Note with the remaining principal being subject to master netting agreements between the Company and such holders. | The Alternate Cashless Exercise Price is defined as that price which shall be the greater of (x) $2.86 and (y) the lowest of (i) the applicable exercise price as in effect on the applicable exercise date, (ii) 85% of the VWAP of the shares of common stock as of the trading day immediately preceding the trading day of delivery of the applicable exercise notice, and (iii) 85% of the lowest VWAP of the shares of common stock on any trading day during the 2 trading day period commencing on, and including, the trading day of the delivery of the applicable exercise notice. | |||||||||||||||
Convertible debt contract description | The contracted conversion prices for the November 2017 Notes, which include both the November Initial Note and November Additional Note, were $12.06. As of December 31, 2017, the Investors had converted $0 of the November 2017 Notes into shares of the Company's common stock. On any unfunded principal balance of the November 2017 Investor Notes the Company owed to the Investors a 5.25% interest obligation which is due quarterly and calculated on a 360-day basis. For the funded portion of the November 2017 Notes the Company has a 10% interest obligation. | ||||||||||||||||
Outstanding balance | $ 2,943,069 | ||||||||||||||||
Accrued amount | $ 1,394,169 | ||||||||||||||||
Additional interest amount | $ 646,263 | ||||||||||||||||
November 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Consideration received in cash for convertible note | |||||||||||||||||
Principal amount | $ 100,000,000 | ||||||||||||||||
Interest percentage | 8.00% | ||||||||||||||||
Warrants issued to purchase common stock | shares | |||||||||||||||||
Common stock at exercise prices | $ / shares | $ 12.06 | ||||||||||||||||
Warrant term | 5 years | ||||||||||||||||
Exchange Note [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
New note shares of common stock | shares | 947,218 | ||||||||||||||||
Trading price | $ 19,950,000 | ||||||||||||||||
Series A-1 Note [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Principal amount | 25,000,000 | ||||||||||||||||
Common stock at exercise prices | $ / shares | $ 6.50 | ||||||||||||||||
Series B-1 Note [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Principal amount | $ 35,000,000 | ||||||||||||||||
Common stock at exercise prices | $ / shares | $ 5.50 | ||||||||||||||||
MoviePass, Inc. [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Principal amount | $ 5,000,000 | ||||||||||||||||
Common stock at exercise prices | $ / shares | $ 0.43 | ||||||||||||||||
Zone Technologies [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Business acquisition related expenses | $ 5,000,000 | ||||||||||||||||
Investor [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Principal amount | $ 4,640,773 | ||||||||||||||||
Interest amount of common stock | 37,126 | ||||||||||||||||
Investor converted total | 1,169,475 | ||||||||||||||||
Investor [Member] | August 2017 Notes [Member] | |||||||||||||||||
Securities Purchase Agreement (Textual) | |||||||||||||||||
Interest expenses | $ 37,126 | ||||||||||||||||
Description of convertible debt | The Investor had fully prepaid the August 2017 Investor Note and subsequently converted $5,794,560 in principal amount, plus accrued interest, of the August 2017 Notes into 1,482,639 shares of the Company's common stock. As of December 31, 2017, the unpaid principal amount of the August 2017 Notes owed to the Investor was $4,505,440. On any principal balance owed by the Company to the Investor, a 6% interest obligation is due quarterly and calculated on a 360-day basis. | ||||||||||||||||
New note shares of common stock | shares | 1,169,475 | ||||||||||||||||
Outstanding balance | $ 4,677,899 | ||||||||||||||||
Accrued amount | $ 37,126 |
Fair Value of Financial Asset54
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Liabilities | ||
Derivative liability - warrants | $ 70,030,200 | $ 67,288,800 |
Derivative liability - conversion feature | 699,900 | 4,834,462 |
Total | 70,730,100 | 72,123,262 |
Level 1 [Member] | ||
Liabilities | ||
Derivative liability - warrants | ||
Derivative liability - conversion feature | ||
Total | ||
Level 2 [Member] | ||
Liabilities | ||
Derivative liability - warrants | ||
Derivative liability - conversion feature | ||
Total | ||
Level 3 [Member] | ||
Liabilities | ||
Derivative liability - warrants | 70,030,200 | 67,288,800 |
Derivative liability - conversion feature | 699,900 | 4,834,462 |
Total | $ 70,730,100 | $ 72,123,262 |
Fair Value of Financial Asset55
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details 1) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis [Abstract] | |
Beginning balance | $ 72,123,262 |
Purchases, issuances and settlements | 181,553,655 |
Conversions to paid in capital | (78,033,527) |
Extinguishment of convertible note | (2,707,712) |
Change in fair value of warrant liabilities | (93,608,200) |
Change in fair value of derivative liabilities | (8,597,378) |
Ending balance | $ 70,730,100 |
Fair Value of Financial Asset56
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details 2) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Expected volatility | 140.00% | 45.00% |
Risk free interest rate | 1.50% | 1.06% |
Contractual term (in years) | 1 month 24 days | 2 months 8 days |
Exercise price | $ 3 | $ 0.001 |
Maximum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Expected volatility | 150.00% | 270.00% |
Risk free interest rate | 2.67% | 2.20% |
Contractual term (in years) | 5 years | 5 years |
Exercise price | $ 12.060 | $ 14.310 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock option [Member] | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Option Indexed to Issuer's Equity [Line Items] | |
Outstanding, Shares | shares | 28,396,428 |
Granted, Options for Common Shares | shares | 39,809,175 |
Exercised, Options for Common Shares | shares | |
Forfeited, cancelled, expired, Options for Common Shares | shares | |
Outstanding, Shares | shares | 68,205,603 |
Vested and exercisable, Options for Common Shares | shares | 16,249,800 |
Outstanding, Weighted Average Exercise Price | $ / shares | $ 0.14 |
Granted, Weighted Average Exercise Price | $ / shares | 0.43 |
Exercised, Weighted Average Exercise Price | $ / shares | |
Forfeited, cancelled, expired, Weighted Average Exercise Price | $ / shares | |
Outstanding, Weighted Average Exercise Price | $ / shares | 0.31 |
Vested and exercisable, Weighted Average | $ / shares | $ 0.13 |
Outstanding as of December 31, 2017, Remaining Contractual Term | 9 years 1 month 16 days |
Outstanding as of March 31, 2018, Remaining Contractual Term | 9 years 5 months 9 days |
Vested and exercisable, Remaining Contractual Term | 8 years 10 months 28 days |
Outstanding as of December 31, 2017, Aggregate Intrinsic Value | $ | $ 8,313,684 |
Outstanding as of March 31, 2018, Aggregate Intrinsic Value | $ | 6,117,060 |
Vested and exercisable, Aggregate Intrinsic Value | $ | $ 3,556,413 |
Stock Based Compensation (Det58
Stock Based Compensation (Details 1) | 3 Months Ended |
Mar. 31, 2018 | |
Stock Based Compensation [Abstract] | |
Risk-free interest rate | 2.50% |
Expected life of options - years | 5 years 9 months 14 days |
Expected stock price volatility | 37.20% |
Expected dividend yield | 0.00% |
Stock Based Compensation (Det59
Stock Based Compensation (Details 2) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding, Shares | shares | 9,631,588 |
Granted, Warrant Shares | shares | 30,949,826 |
Exercised, Warrant Shares | shares | (10,860,000) |
Outstanding, Shares | shares | 29,721,414 |
Outstanding, Weighted Average Exercise Price | $ / shares | $ 6.04 |
Granted, Weighted Average Exercise Price | $ / shares | 6.15 |
Exercised, Weighted Average Exercise Price | $ / shares | 5.51 |
Outstanding, Weighted Average Exercise Price | $ / shares | $ 5.99 |
Weighted Average Remaining Contractual Life Years, Outstanding/exercisable, Beginning | 4 years 10 months 10 days |
Weighted Average Remaining Contractual Life Years, Outstanding/exercisable, Granted | 4 years 10 months 17 days |
Weighted Average Remaining Contractual Life Years, Outstanding/exercisable, Exercised | 4 years 10 months 17 days |
Total, Weighted Average Remaining Contractual Life Years | 4 years 10 months 17 days |
Stock Based Compensation (Det60
Stock Based Compensation (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 03, 2014 | |
Stock Based Compensation (Textual) | |||
Shares issued to plan | |||
Recognized value to related stock compensation expense | $ 5,766,329 | ||
Unamortized stock compensation expense | 2,054,341 | ||
Share based compensation expense | |||
Employee Stock Option [Member] | |||
Stock Based Compensation (Textual) | |||
Share based compensation expense | 1,996,312 | $ 44,450 | |
MoviePass, Inc. [Member] | |||
Stock Based Compensation (Textual) | |||
Recognized value to related stock compensation expense | |||
Common stock for issuance grant | 41,009,175 | ||
Options exercise price | $ 0.43 | ||
Minimum [Member] | |||
Stock Based Compensation (Textual) | |||
Award date ranging from agreement | 18 months | ||
Maximum [Member] | |||
Stock Based Compensation (Textual) | |||
Award date ranging from agreement | 24 months | ||
Consultant [Member] | |||
Stock Based Compensation (Textual) | |||
Shares issued to plan | 481,688 | ||
Recognized value to related stock compensation expense | $ 3,747,851 | ||
Employees [Member] | Consultant [Member] | |||
Stock Based Compensation (Textual) | |||
Shares issued to plan | 1,202,167 | ||
2014 Equity Incentive Plan [Member] | |||
Stock Based Compensation (Textual) | |||
Reserved shares of common stock | 400,000 | ||
Recognized value to related stock compensation expense | $ 11,066,605 | ||
Terminate date | Mar. 3, 2024 | ||
Equity incentive plan, description | The 2014 Plan also provides for an annual automatic increase in the number of shares of common stock authorized for issuance thereunder by the lesser of (A) 3,000,000 shares of the Company's common stock or the equivalent of such number of shares after the administrator of the 2014 Plan, in its sole discretion, has interpreted the effect of any stock split, stock dividend, combination, recapitalization or similar transaction; (B) a number of shares of common stock equal to 5% of the Company's common stock outstanding on January 2nd of each year, and (C) an amount determined by the Company's Board of Directors. A total of 2,610,000 shares of common stock remained available for issuance as of March 31, 2018. | ||
2011 Plan [Member] | MoviePass, Inc. [Member] | |||
Stock Based Compensation (Textual) | |||
Common stock for issuance grant | 95,000,000 | ||
Stock options granted pursuant to the term, description | Stock options granted pursuant to the terms of the 2011 Plan generally cannot be granted with an exercise price of less than 100% of the fair market value on the date of grant. The term of the options granted under the 2011 Plan cannot be greater than 10 years. Options vest at varying rates generally over three to five years along with performance based options. |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018CustomersVendors | Mar. 31, 2017Customers | Dec. 31, 2017CustomersVendors | |
Consulting revenue [Member] | |||
Concentration of Credit Risk (Textual) | |||
Number of customers | Customers | 4 | 4 | |
Concentration risk, percentage | 94.70% | 87.00% | |
Consulting accounts receivables [Member] | |||
Concentration of Credit Risk (Textual) | |||
Number of customers | Customers | 5 | 4 | |
Concentration risk, percentage | 90.50% | 62.60% | |
Consulting accounts payables [Member] | |||
Concentration of Credit Risk (Textual) | |||
Number of vendors | Vendors | 5 | 3 | |
Concentration risk, percentage | 98.40% | 82.70% | |
Technology accounts payables [Member] | |||
Concentration of Credit Risk (Textual) | |||
Number of vendors | Vendors | 1 | 3 | |
Concentration risk, percentage | 68.70% | 60.80% | |
Subscription accounts receivables [Member] | |||
Concentration of Credit Risk (Textual) | |||
Number of customers | Customers | 3 | 2 | |
Concentration risk, percentage | 98.40% | 100.00% | |
Subscription accounts payables [Member] | |||
Concentration of Credit Risk (Textual) | |||
Number of vendors | Vendors | 7 | 1 | |
Concentration risk, percentage | 73.70% | 41.00% |
Commitments and Contingencies62
Commitments and Contingencies (Details) | Mar. 31, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
Less than 1 year | $ 295,730 |
1 to 3 years | 532,933 |
3 to 5 years | 289,988 |
Thereafter | |
Total | $ 1,118,651 |
Commitments and Contingencies63
Commitments and Contingencies (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | |
Commitments and Contingencies (Textual) | |||
Rent expense | $ 213,345 | $ 47,800 | |
Lease agreement, term | 3 years | ||
Monthly rent payments for the first 12 months | $ 5,026 | ||
Monthly rent payments for the next 12 months | 5,177 | ||
Monthly rent payments for the last 12 months | $ 5,332 | ||
Lease expiration, date | Apr. 30, 2020 | Jun. 30, 2022 |
Transactions with Related Par64
Transactions with Related Parties (Details) - USD ($) | Oct. 05, 2017 | Mar. 31, 2018 |
Consulting Agreement [Member] | ||
Transactions with Related Parties (Textual) | ||
Servicing fees | $ 18,750 | |
Mr. Gadiyaram [Member] | ||
Transactions with Related Parties (Textual) | ||
Servicing fees | $ 18,750 |
Provision for Income Taxes (Det
Provision for Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Provision for Income Taxes [Abstract] | ||
Tax provision | $ 7,951 | $ 30,484 |
US statutory tax rates | 21.00% | 35.00% |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 49,442,860 | $ 1,358,062 | ||
Cost of revenue | 135,968,976 | 1,105,485 | ||
Gross profit (loss) | (86,526,116) | 252,577 | ||
Total operating expenses | 21,205,877 | 4,611,097 | ||
Loss from operations | (107,731,993) | (4,358,520) | ||
Total other income/(expense) | 81,693,719 | (2,108,551) | ||
Provision for income taxes | 7,951 | 30,484 | ||
Total net income (loss) | 5,175,875 | (6,497,555) | ||
Cash and cash equivalents | 42,520,518 | 3,235,423 | $ 24,949,393 | $ 2,747,240 |
Accounts receivable | 24,432,216 | 27,470,219 | ||
Prepaid expenses and other current assets | 3,267,327 | 3,557,811 | ||
Property and equipment | 310,727 | 234,035 | ||
Intangible assets, net | 27,279,711 | 28,536,782 | ||
Goodwill | 79,137,177 | 79,137,177 | ||
Deposits and other assets | 147,046 | 147,171 | ||
Accounts payable and accrued expenses | 13,328,090 | 13,144,003 | ||
Liabilities to be settled in stock | 10,276,266 | 21,320,705 | ||
Derivative liability | 70,730,100 | 72,123,262 | ||
Consulting [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 839,503 | 1,358,062 | ||
Cost of revenue | 711,194 | 1,105,485 | ||
Gross profit (loss) | 128,309 | 252,577 | ||
Total operating expenses | 8,417,912 | (3,313,547) | ||
Loss from operations | (8,289,603) | (3,060,970) | ||
Total other income/(expense) | 81,710,691 | (2,091,563) | ||
Provision for income taxes | 4,176 | (30,484) | ||
Total net income (loss) | 73,425,264 | (5,183,017) | ||
Cash and cash equivalents | 34,089,256 | 569,886 | ||
Accounts receivable | 280,988 | 332,753 | ||
Prepaid expenses and other current assets | 2,566,708 | 3,382,127 | ||
Property and equipment | 159,918 | 96,464 | ||
Deposits and other assets | 128,994 | 129,119 | ||
Accounts payable and accrued expenses | 2,977,315 | 2,088,867 | ||
Liabilities to be settled in stock | 9,957,166 | 20,875,045 | ||
Convertible notes payable | 641,206 | 3,611,627 | ||
Warrant liability | 70,030,200 | 67,288,800 | ||
Derivative liability | 1,030,200 | 4,834,462 | ||
Technology [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | ||||
Cost of revenue | ||||
Gross profit (loss) | ||||
Total operating expenses | 1,133,448 | (1,297,550) | ||
Loss from operations | (1,133,448) | (1,297,550) | ||
Total other income/(expense) | (16,972) | (16,988) | ||
Provision for income taxes | ||||
Total net income (loss) | (1,150,420) | (1,314,538) | ||
Cash and cash equivalents | 3,949,506 | 21,933,765 | ||
Prepaid expenses and other current assets | 38,333 | 21,666 | ||
Property and equipment | 91,512 | 95,301 | ||
Intangible assets, net | 2,468,186 | 2,829,295 | ||
Goodwill | 4,599,969 | |||
Deposits and other assets | 10,052 | 10,052 | ||
Accounts payable and accrued expenses | 396,035 | 607,622 | ||
Liabilities to be settled in stock | 319,100 | 445,660 | ||
Subscription and Marketing and Promotional Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 48,603,357 | |||
Cost of revenue | 135,257,782 | |||
Gross profit (loss) | (86,654,425) | |||
Total operating expenses | 11,654,517 | |||
Loss from operations | (98,308,942) | |||
Total other income/(expense) | ||||
Provision for income taxes | (12,127) | |||
Total net income (loss) | (98,321,069) | |||
Cash and cash equivalents | 4,481,756 | 2,445,742 | ||
Accounts receivable | 24,151,228 | 27,137,466 | ||
Prepaid expenses and other current assets | 662,286 | 154,018 | ||
Property and equipment | 59,297 | 42,270 | ||
Intangible assets, net | 24,811,525 | 25,707,487 | ||
Goodwill | 79,137,177 | 79,137,177 | ||
Deposits and other assets | 8,000 | 8,000 | ||
Accounts payable and accrued expenses | 9,954,740 | $ 10,447,514 | ||
Deferred revenue | $ 84,887,136 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 3 Months Ended |
Mar. 31, 2018segments | |
Segment Reporting (Textual) | |
Number of operating segments | 3 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | May 14, 2018 | Apr. 04, 2018 | Apr. 30, 2018 | Apr. 18, 2018 | Apr. 16, 2018 | Apr. 12, 2018 | Dec. 11, 2017 |
Subsequent Events (Textual) | |||||||
Cash | $ 1,000,000 | ||||||
Subsequent Event [Member] | |||||||
Subsequent Events (Textual) | |||||||
Issuance of common stock | 24,700,000 | ||||||
Amount of aggregate gross proceeds received | $ 21,800,000 | ||||||
Description of subscription agreement | In addition, during the same period the Company received gross proceeds of approximately $5.9 million with respect to funding of the November 2017 investor notes and issued approximately 8.0 million shares with respect to the conversion of such funded notes, including 2.4 million shares related to the make whole interest provisions of such notes | ||||||
Subsequent Event [Member] | Equity Distribution Agreement [Member] | |||||||
Subsequent Events (Textual) | |||||||
Aggregate common stock value | $ 150,000,000 | ||||||
Subsequent Event [Member] | Underwriting Agreement [Member] | |||||||
Subsequent Events (Textual) | |||||||
Amount of aggregate gross proceeds received | $ 30,000,000 | ||||||
Warrants to purchase of common stock, description | The Company including (A) 10,500,000 Series A-2 units (the "Series A-2 Units"), with each Series A-2 Unit consisting of (i) one share of the Company's common stock and (ii) one Series A-2 warrant to purchase one share of common stock (the "Series A-2 Warrants"); and for those purchasers whose purchase of Series A-2 Units would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 9.99% of the Company's outstanding common stock following the consummation of the Offering, (B) 500,000 Series B-2 units (the "Series B-2 Units", and together with the "Series A-2 Units", the "Units"), consisting of (i) one pre-funded Series B-2 warrant to purchase one share of common stock (the "Series B-2 Warrants", together with the Series A-2 Warrants, the "Warrants") and (ii) one Series A-2 Warrant. The Units were sold at a price to the public equal to $2.75 per Unit. | ||||||
Net proceeds from sale of the units | $ 27,500,000 | ||||||
Deducting underwriting discounts and commissions | 1,663,750 | ||||||
Estimated offering expenses | 1,050,000 | ||||||
Series B-2 warrants exercised aggregate amount | $ 500 | ||||||
Subsequent Event [Member] | Moviefone Acquisition [Member] | |||||||
Subsequent Events (Textual) | |||||||
Cash | $ 1,000,000 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.50 | ||||||
Warrants to purchase common stock | 2,550,154 | ||||||
Issuance of common stock | 2,550,154 | ||||||
Subsequent Event [Member] | New Subscription Agreement with MoviePass [Member] | |||||||
Subsequent Events (Textual) | |||||||
Description of subscription agreement | The Company advanced a total of $35,000,000 to MoviePass (the "Second Advance"). On April 16, 2018, the Company entered into an additional Subscription Agreement with MoviePass (the "April 2018 Agreement"), pursuant to which, in lieu of repayment of the Second Advance, MoviePass agreed to sell to the Company an amount of shares of common stock of MoviePass equal to 10.6% of the total then outstanding MoviePass Common Stock (excluding shares underlying MoviePass options and warrants) (the "April 2018 MoviePass Purchased Shares"), based on a pre-money valuation of MoviePass of $295,525,000 as of March 31, 2018. Pursuant to the April 2018 Agreement, MoviePass also agreed to issue to the Company, in addition to the April 2018 MoviePass Purchased Shares, without payment of additional consideration by the Company, for purposes of anti-dilution, an amount of shares of common stock of MoviePass that caused the Company's total ownership of the outstanding shares of common stock of MoviePass (excluding shares underlying MoviePass options and warrants), together with the April 2018 MoviePass Purchased Shares, to equal 91.8% as of April 12, 2018. | ||||||
Payments advanced to related party | $ 35,000,000 |