Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 14, 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 | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 636,867,521 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 15,512,810 | $ 24,949,393 |
Accounts receivable - less allowance for doubtful accounts of $58,615 and $72,335 at June 30, 2018 and December 31, 2017, respectively | 28,651,739 | 27,470,219 |
Prepaid expenses and other current assets | 9,362,755 | 3,557,811 |
Total current assets | 53,527,304 | 55,977,423 |
Property and equipment, net of accumulated depreciation of $310,190 and $274,587 at June 30, 2018 and December 31, 2017, respectively | 369,530 | 234,035 |
Intangible assets, net | 31,462,246 | 28,536,782 |
Goodwill | 87,672,135 | 79,137,177 |
Investment in films, net | 2,052,882 | |
Deposits and other assets | 209,492 | 147,171 |
Total assets | 175,293,589 | 164,032,588 |
Current liabilities: | ||
Accounts payable and accrued expenses | 21,262,591 | 13,144,003 |
Deferred revenue | 65,371,837 | 54,425,630 |
Liabilities to be settled in stock | 5,988,363 | 21,320,705 |
Convertible notes payable, net of debt discount of $0 and $2,444,368, respectively | 2,061,072 | |
Warrant liability | 4,266,100 | 67,288,800 |
Derivative liability | 41,537,054 | 4,834,462 |
Total current liabilities | 138,425,945 | 163,074,672 |
Convertible notes payable, net of current portion and debt discount of $25,515,482 and $1,392,514, respectively | 311,705 | 1,550,555 |
Total liabilities | 138,737,650 | 164,625,227 |
Commitments and contingencies | ||
Stockholders' equity/(deficit): | ||
Preferred stock, $0.01 par value; 2,000,000 shares authorized; 20,500 and 0 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 205 | |
Common stock, $0.01 par value; 500,000,000 shares authorized; 999,482 issued and outstanding as of June 30, 2018; 100,000,000 shares authorized; 95,925 issued and outstanding as of December 31, 2017 | 9,994 | 959 |
Paid-in capital | 302,190,038 | 150,595,611 |
Accumulated other comprehensive loss - foreign currency translation | (132,700) | (103,980) |
Accumulated deficit | (247,654,083) | (189,495,185) |
Total Helios and Matheson Analytics Inc. stockholders' equity/(deficit) | 54,413,454 | (39,002,595) |
Noncontrolling interest | (17,857,515) | 38,409,956 |
Total stockholders' equity/(deficit) | 36,555,939 | (592,639) |
Total liabilities and stockholders' equity/(deficit) | $ 175,293,589 | $ 164,032,588 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 58,615 | $ 72,335 |
Property and equipment, net of depreciation | 310,190 | 274,587 |
Convertible notes payable, debt discount - current | 0 | 2,444,368 |
Convertible notes payable, debt discount - long term | $ 25,515,482 | $ 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 | 20,500 | 0 |
Preferred stock, shares outstanding | 20,500 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 100,000,000 |
Common stock, shares issued | 999,482 | 95,925 |
Common stock, shares outstanding | 999,482 | 95,925 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Income/(Loss) (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Consulting | $ 829,606 | $ 1,140,951 | $ 1,669,109 | $ 2,499,013 |
Subscription | 72,403,640 | 119,566,087 | ||
Marketing and promotional services | 935,488 | 2,376,398 | ||
Total revenues | 74,168,734 | 1,140,951 | 123,611,594 | 2,499,013 |
Cost of revenue | 178,766,719 | 917,564 | 314,735,695 | 2,023,049 |
Gross (loss)/profit | (104,597,985) | 223,387 | (191,124,101) | 475,964 |
Operating expenses: | ||||
Selling, general & administrative | 20,508,528 | 1,635,710 | 40,218,359 | 5,780,446 |
Research and development | 154,693 | 897,905 | 379,464 | 933,341 |
Depreciation & amortization | 1,377,653 | 433,671 | 2,648,928 | 864,596 |
Total operating expenses | 22,040,874 | 2,967,286 | 43,246,751 | 7,578,383 |
Loss from operations | (126,638,859) | (2,743,899) | (234,370,852) | (7,102,419) |
Other income/(expense): | ||||
Change in fair market value - derivative liabilities | 4,647,666 | (301,479) | 13,245,044 | 680,852 |
Change in fair market value - warrant liabilities | 96,231,888 | 189,840,088 | ||
Gain on the extinguishment of debt | 15,007,699 | |||
Gain on exchange of warrants | 301,487 | 301,487 | ||
Interest expense | (58,195,051) | (2,184,374) | (93,729,950) | (5,293,206) |
Interest income | 6,286 | 19,309 | 21,627 | 37,259 |
Total other income/(expense) | 42,992,276 | (2,466,544) | 124,685,995 | (4,575,095) |
Loss before income taxes | (83,646,583) | (5,210,443) | (109,684,857) | (11,677,514) |
Provision for income taxes | 28,719 | 11,373 | 36,670 | 41,857 |
Net loss | (83,675,302) | (5,221,816) | (109,721,527) | (11,719,371) |
Net loss attributable to the noncontrolling interest | 20,340,529 | 51,562,629 | ||
Net loss attributable to Helios and Matheson Analytics Inc. | (63,334,773) | (5,221,816) | (58,158,898) | (11,719,371) |
Other comprehensive (loss)/income - foreign currency adjustment | (21,570) | 466 | (28,720) | 1,289 |
Comprehensive loss | $ (63,356,343) | $ (5,221,350) | $ (58,187,618) | $ (11,718,082) |
Basic and diluted loss per share: | ||||
Net loss per share attributable to common stockholders - basic and diluted | $ (132.47) | $ (198.68) | $ (189.33) | $ (491.80) |
Weighted average shares - basic and diluted | 478,105 | 26,283 | 307,178 | 23,830 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Equity/(Deficit) (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) | Total | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive Income | Accumulated Deficit | Noncontrolling Interest |
Balance at Dec. 31, 2017 | $ (592,639) | $ 959 | $ 150,595,611 | $ (103,980) | $ (189,495,185) | $ 38,409,956 | |
Balance, shares at Dec. 31, 2017 | 95,925 | ||||||
Settlement of warrant liability for March warrant exchange | 12,894,165 | $ 182 | 12,893,983 | ||||
Settlement of warrant liability for March warrant exchange, shares | 18,186 | ||||||
Settlement of warrant liability for June warrant exchange | 5,202,100 | $ 905 | 5,201,195 | ||||
Settlement of warrant liability for June warrant exchange, shares | 90,472 | ||||||
Warrant liability which ceases to exist | 53,998,650 | 53,998,650 | |||||
Conversion of convertible notes and interest to shares of common stock | 34,573,321 | $ 2,515 | 34,570,806 | ||||
Conversion of convertible notes and interest to shares of common stock, shares | 251,547 | ||||||
Shares issued for settlement of liabilities | 15,670,686 | $ 49 | 15,670,637 | ||||
Shares issued for settlement of liabilities, shares | 4,909 | ||||||
MoviePass shares issued in exchange for services | 324,369 | 324,369 | |||||
Share-based compensation | 6,009,161 | $ 45 | 6,009,116 | ||||
Share-based compensation, shares | 4,527 | ||||||
Derivative liability which ceases to exist | 24,313,054 | 24,313,054 | |||||
Equity raise, net of transaction fees | 51,870,819 | $ 4,033 | 51,866,786 | ||||
Equity raise, net of transaction fees, shares | 403,315 | ||||||
Shares issued for February public offering | 96,912,381 | $ 764 | 96,911,617 | ||||
Shares issued for February public offering, shares | 76,400 | ||||||
Reclassification of February public offering to warrant liability | (158,944,798) | (158,944,798) | |||||
Shares issued for April public offering | 27,699,813 | $ 440 | 27,699,373 | ||||
Shares issued for April public offering, shares | 44,000 | ||||||
Reclassification of April public offering to warrant liability | (33,997,600) | (33,997,600) | |||||
Preferred shares issued in conjunction with June notes | 2,773,246 | $ 205 | 2,773,041 | ||||
Preferred shares issued in conjunction with June notes, shares | 20,500 | ||||||
Shares issued in connection with Moviefone acquisition | 7,599,458 | $ 102 | 7,599,356 | ||||
Shares issued in connection with Moviefone acquisition, shares | 10,201 | ||||||
Adjustment of noncontrolling interest in connection with the MoviePass acquisition | 4,704,842 | (4,704,842) | |||||
Net loss | (109,721,527) | (58,158,898) | (51,562,629) | ||||
Foreign exchange translation | (28,720) | (28,720) | |||||
Balance at Jun. 30, 2018 | $ 36,555,939 | $ 205 | $ 9,994 | $ 302,190,038 | $ (132,700) | $ (247,654,083) | $ (17,857,515) |
Balance, shares at Jun. 30, 2018 | 20,500 | 999,482 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (109,721,527) | $ (11,719,371) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,648,928 | 864,596 |
Gain on exchange of warrants | (301,487) | |
Change in fair market value - derivative liabilities | (13,245,044) | (599,941) |
Change in fair market value - warrant liabilities | (189,840,088) | (80,911) |
Gain on extinguishment of debt | (15,007,699) | |
Provision for doubtful accounts | (13,721) | 2,005 |
Non-cash interest expense | 83,358,460 | 4,553,566 |
Shares issued in exchange for services | 8,768,450 | 1,896,400 |
Amortization of film costs | 2,158,118 | |
Shares issued in advance of services | 324,369 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (1,167,799) | 63,894 |
Unbilled receivables | (13,418) | |
Prepaid expenses and other current assets | (8,550,256) | (106,445) |
Investment in films | (4,211,000) | |
Accounts payable and accrued expenses | 14,707,327 | 271,124 |
Deferred revenue | 10,946,207 | |
Deposits and other assets | (62,321) | (70,541) |
Net cash used in operating activities | (219,209,083) | (4,939,042) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Sale of property and equipment | 958 | |
Purchases of equipment | (171,098) | (101,322) |
Trendit Ltd patent acquisition | (195,143) | |
Payment for acquisition of business | (1,000,000) | 0 |
Net cash used in investing activities | (1,171,098) | (295,507) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from note payable | 50,077,889 | 4,000,000 |
Proceeds from February public offering, net of transaction fees | 96,931,481 | |
Note repayment | (27,894,062) | (80,000) |
Payment of deferred financing fees | (2,170,328) | |
Payment of Make-Whole Interest | (5,000,000) | |
Proceeds from April public offering, net of transaction fees | 27,699,813 | |
Proceeds from equity raises, net of transaction fees | 51,870,819 | |
Proceeds from issuance of June notes and preferred shares, net of transaction fees | 20,235,925 | |
Settlement of warrant liability | (779,219) | |
Net cash provided by financing activities | 210,972,318 | 3,920,000 |
Net change in cash | (9,407,863) | (1,314,549) |
Effect of foreign currency exchange rate changes on cash and cash equivalents | (28,720) | 1,289 |
Cash, beginning of period | 24,949,393 | 2,747,240 |
Cash, end of period | 15,512,810 | 1,433,980 |
Supplemental disclosure of cash and non-cash transactions: | ||
Cash paid during the period for interest | 10,371,490 | 253,407 |
Cash paid for income taxes | 5,975 | |
Non-cash investing and financing activites | ||
Conversion of convertible notes and interest to shares of common stock | 34,573,321 | (6,699,402) |
Settlement of warrants | 18,096,265 | |
Warrant liability which ceases to exist | 53,998,650 | |
Debt discount for derivative and warrant liability | 65,341,847 | |
Derivative ceases to exist - reclassified to paid in capital | 23,313,054 | (1,868,628) |
Increase in debt for new original issue discount | 24,600,000 | 1,640,659 |
Reclassification of warrant from public offering to derivative liability | (192,942,398) | |
Non-cash fees relating to public offering | (19,100) | |
Non-cash consideration for MovieFone acquisition | (13,074,958) | |
Original issue discount and preferred stock for debt discount | 7,137,321 | |
Interest capitalized as debt | $ 2,162,515 |
General
General | 6 Months Ended |
Jun. 30, 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”, “HMNY” 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 | 6 Months Ended |
Jun. 30, 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 movie titles in theaters, 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 company (“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. In April 2018, the Company acquired the Moviefone brand and related assets (“Moviefone”). Moviefone is an entertainment information and marketing service which provides its users with access to the entire entertainment ecosystem. Moviefone delivers movie show times and tickets, trailers, TV schedules, streaming information, cast and crew interviews, photo galleries and more. Moviefone’s editorial coverage includes up-to-date entertainment news, trailers and clips, red-carpet coverage and celebrity features. On May 15, 2018 the Company formed MoviePass Films LLC, a Delaware limited liability company (“MoviePass Films”) to focus on studio-driven content and new film production for theatrical release and other distribution channels. On May 23, 2018, the Company executed a binding letter of intent (the “LOI”) with Emmett Furla Oasis Films LLC (“EFO”) pursuant to which EFO acquired a 49% membership interest in MoviePass Films. 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 equity interests 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, Moviefone as of April 4, 2018, MoviePass Ventures as of January 2018 and MoviePass Films as of May 15, 2018. Reverse Stock-Split On July 24, 2018, the Company effected a reverse stock-split of its issued and outstanding common stock at a ratio of one-for-250 (“Reverse Stock Split”). The Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware effecting the Reverse Stock Split. The Reverse Stock Split did not affect the number of authorized shares of common stock, which, following the increase in authorized shares effected on July 23, 2018 discussed in Note 11, remains at 5,000,000,000 shares. A proportionate adjustment was made to (i) the per share exercise price and the number of shares issuable upon the exercise or conversion of the Company’s outstanding equity awards, options and warrants to purchase shares of common stock and outstanding convertible notes and (ii) the number of shares reserved for issuance pursuant to the Company’s 2014 Equity Incentive Plan. The accompanying condensed consolidated financial statements and notes give retroactive effect to the Reverse Stock Split for all periods presented. 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 liabilities, 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 | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Revenue Recognition ASC 606 Revenue from Contracts with Customers (“ASC 606”) 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 605. 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 Six Months Ended 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Consulting $ 829,606 $ 1,140,951 $ 1,669,109 $ 2,499,013 Subscription 72,403,640 - 119,566,087 - Marketing and promotional services 935,488 - 2,376,398 - Total revenues $ 74,168,734 $ 1,140,951 $ 123,611,594 $ 2,499,013 The following is a description of the principal activities from which the Company generates revenue, including from consulting customers and subscribers. 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 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 subscription services can be used by 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. Marketing and Promotional Services 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. Revenue from our participation in the theatrical release of feature films is recognized as earned based on our share of the ultimate expected revenue. 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 the Company’s 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 and six months ended June 30, 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 on the straight-line method over their useful lives ranging from three to twelve years. The Company recorded amortization expense of $1,357,467 and $426,651 for the three months ended June 30, 2018 and 2017, respectively, and $2,613,326 and $853,302 for the six months ended June 30, 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 because the carrying value is greater than the projected undiscounted cash flows, 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 the assets’ fair 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 and six months ended June 30, 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 Topic 718, Stock Compensation Equity Fair Value Measurements ASC Topic 820, Fair Value Measurement and Disclosures 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, including pricing models, discounted cash flow methodologies, or similar techniques. The carrying value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. The liabilities in connection with the conversion and make-whole features included within certain of the Company’s convertible notes payable and warrants are each classified as a level 3 liability. Derivative Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates its convertible notes and warrants to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Paragraph 815-10-05-4 of the FASB ASC and Paragraph 815-40-25 of the Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current to correspond with its host instrument. The Company marks to market the fair value of the embedded derivatives at each balance sheet date and records the change in the fair value of the embedded derivatives as other income or expense in the statements of operations. The Company utilizes a Monte Carlo Method that values the liability of the debt conversion feature derivative financial instruments and derivative warrants based on a probability of a down round event. The reason the Company selected the lattice binomial model is that in many cases there may be multiple embedded features or the features of the bifurcated derivatives may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument. Therefore, the fair value may not be appropriately captured by simple models. Warrant Liability The Company evaluates its warrants to determine if those contracts qualify as liabilities in accordance with ASC 480-10 and ASC 815-40. The result of this accounting treatment is that the fair value of the warrant liability is marked-to-market each balance sheet date and recorded as a liability, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a warrant liability, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. For warrants with a fixed conversion price and a fixed number of shares, the Company utilizes a Black Scholes model for valuation. For warrants with variability in the number of shares or conversion price (such as a down round feature), the Company utilizes the Monte Carlo Method to value the warrant liability. The reason the Company selected the lattice binomial model is that in many cases there may be multiple embedded features or the features may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument. Therefore, the fair value may not be appropriately captured by simple models. Accounting for Film Costs We capitalize costs of acquiring participation rights to films. The costs for an individual film are amortized to direct operating expenses in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the current year expected to be recognized from the distribution, exhibition or sale of such film. Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release of the motion picture. For participation rights previously released films acquired as part of a library, ultimate revenue includes estimates over a period not to exceed twenty years from the date of acquisition. Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates may differ from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of our business, some films and titles are more successful or less successful than anticipated. Management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and/or write-down of all or a portion of the unamortized costs of the film to its estimated fair value. Management estimates the ultimate revenue based on experience with similar titles or title genre, the general public appeal of the cast, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change. An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less film amortization expense, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher film amortization expense, and could also periodically result in an impairment requiring a write-down of the film cost to the title’s fair value. These write-downs are included in amortization expense within cost of revenues in our consolidated statements of operations. Investment in films is stated at the lower of amortized cost or estimated fair value. Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes in our future revenue estimates. Recent Accounting Pronouncements The following accounting standards updates were recently issued and have not yet been adopted. These standards are currently under review to determine their impact on the consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases, Codification Improvements to Topic 842 (Leases) Leases (Topic 842), Targeted Improvements 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 (“ASU 2017-11”), Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Going Concern Analysis
Going Concern Analysis | 6 Months Ended |
Jun. 30, 2018 | |
Going Concern Analysis [Abstract] | |
Going Concern Analysis | 4. Going Concern Analysis 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 twelve months after the Company’s interim financial statements were issued (August 14, 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 August 14, 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 June 30, 2018, the Company had an accumulated deficit of $247,654,083, a loss from operations for the three and six months ended June 30, 2018 of $126,638,859 and $234,370,852, respectively, and net cash used in operating activities for the six months ended June 30, 2018 of $219,209,083. The Company expects to continue to incur net losses and have significant cash outflows for at least the next twelve months. As of June 30, 2018, the Company had cash and a working capital deficit of $15,512,810 and $84,898,641, respectively, compared to $24,949,393 and $107,097,249 as of December 31, 2017. Of the working capital deficit at June 30, 2018, $45,803,154 pertained to warrant and derivative liabilities classified on the balance sheet within current 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 the Company’s 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 June 30, 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. Additionally, during May and June of 2018, the Company received $25,077,889 in gross proceeds related to the convertible debt financing obtained on November 7, 2017. On June 26, 2018, the Company obtained preferred stock and convertible debt financing for up to $139,400,000 in gross proceeds, of which the Company had received $20,500,000 in gross proceeds as of June 30, 2018, which the Company used for general corporate purposes and transaction expenses. The Company may also use the proceeds to make other acquisitions. As of June 30, 2018 the Company had $0 and $352,188 of make-whole principal balance outstanding under the Senior Convertible Notes issued to institutional investors on November 7, 2017 and January 23, 2018, respectively, and there remained $228,672,111 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 SEC on February 9, 2018, which allows the Company to offer and sell up to $400,000,000 of its equity or equity-linked securities. 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 February 2018 public offering were $96.9 million. The Company also completed an underwritten public offering of common stock and warrants for gross proceeds of approximately $30.3 million on April 23, 2018. The total net proceeds to the Company from the April 2018 public offering were approximately $27.5 million. On April 18, 2018, the Company entered into an Equity Distribution Agreement (the “Sales Agreement”) with Canaccord Genuity LLC (“Canaccord”) under which the Company may offer and sell under the shelf registration statement up to $150 million of its common stock at prevailing market prices in a continuous at-the market offering (the “ATM Offering”) through its sales agent Canaccord. The Company may use the net proceeds from the ATM Offering to increase the Company’s ownership stake in MoviePass and to support the operations of MoviePass and MoviePass Ventures, to satisfy a portion or all of any amounts due and payable in connection with the convertible notes issued on November 7, 2017, January 23, 2018 and June 26, 2018, and for general corporate purposes and transaction expenses. The proceeds may also be used for acquisitions. As of June 30, 2018, the Company has sold 0.4 million shares (100.8 million pre-split), and received net proceeds of $52.7 million, pursuant to the ATM Offering. Without raising additional capital, there is substantial doubt about the Company’s ability to continue as a going concern through August 14, 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. Notice of Potential Delisting from NASDAQ On June 21, 2018, the Company received a deficiency letter from the Nasdaq Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the prior 30 consecutive business days, the closing bid price for the Company’s common stock has closed below a minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (“Rule 5550(a)(2)”). The Nasdaq deficiency letter has no immediate effect on the listing of the Company’s common stock, and its common stock will continue to trade on the Nasdaq under the symbol “HMNY” at this time. In accordance with Nasdaq Listing Rule 5810(b), the Company has been given 180 calendar days, or until December 18, 2018 to regain compliance with Rule 5550(a)(2). The Company intends to monitor the closing bid price of its common stock and consider its available options to resolve its noncompliance with Rule 5550(a)(2). |
Acquisitions of MoviePass and M
Acquisitions of MoviePass and Moviefone and the Formation of MoviePass Films | 6 Months Ended |
Jun. 30, 2018 | |
Acquisitions of MoviePass and Moviefone and the Formation of MoviePass Films [Abstract] | |
Acquisitions of MoviePass and Moviefone and the Formation of MoviePass Films | 5. Acquisitions of MoviePass and Moviefone and the Formation of MoviePass Films Acquisition of Controlling Interest in MoviePass Inc. On December 11, 2017, the Company completed its acquisition of a 62.41% majority interest in MoviePass (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 16,000 (4,000,000 pre-split) 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. Of that amount, 2,667 (666,667 pre-split) 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 Transaction 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 the 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 Emerging Issues Task Force (“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 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. 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. In addition, from April 16, 2018 through June 30, 2018 the Company has advanced MoviePass, $112,731,000 for operational funding. Such amount remains payable to the Company by MoviePass and has been eliminated in consolidation for financial reporting purposes. The Company has accounted for the March 2018 MoviePass Purchased Shares and the April 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 and April 12, 2018 was reduced respectively, 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. Acquisition of Moviefone Brand On April 4, 2018, the Company entered into an Asset Purchase Agreement (the “Moviefone Purchase Agreement”) with Oath Inc. (formerly, AOL Inc.), a Delaware corporation and subsidiary of Verizon Communications and certain of its subsidiaries (“Oath”), pursuant to which the Company completed the acquisition from Oath of certain products, rights, technology, contracts, data and other assets related to the Moviefone brand (the “Moviefone Assets”). The acquisition of Moviefone has been accounted for as the acquisition of a business. The historical operational results of Moviefone were not significant for purposes of providing pro forma financial information. The purchase price for the Moviefone Assets consisted of the following: (i) $1.0 million in cash, (ii) the issuance of 10,201 (2,550,154 pre-split) shares of common stock of the Company with a market value of $7.6 million as of the closing date, and (iii) the issuance of warrants to purchase 10,201 (2,550,154 pre-split) shares of common stock of the Company at an exercise price of $1,375 ($5.50 pre-split) per share. In addition, and pursuant to the Moviefone Purchase Agreement, the Company assumed certain specified liabilities incurred after the acquisition date and retained certain employees of Moviefone. The Company determined the provisional fair value of the acquired intangible assets through a combination of the market approach, cost and the income approach. The significant assumptions used in certain valuations associated with the Moviefone transaction include discount rates ranging from 9.0% to 22.1%. In determining the value of tradenames and trademarks the Company observed royalty rates ranging from 0.0% to 100.0% and utilized a 10.0% rate for Moviefone’s aggregated tradenames and trademarks. Additionally, the Company utilized a cost approach for Moviefone’s technology assets acquired based on man hours to construct in determining the fair value of the acquired technology. The non-compete agreements were analyzed and found to have a de minimis value. The estimated useful lives of acquired intangible assets are 20 years for tradenames and trademarks, 7 years for customer relationships and 3 years for technology. The following table summarizes the consideration paid for Moviefone by the Company, and the amounts of assets acquired, and liabilities assumed and recognized at the acquisition date: Purchase consideration: Moviefone Cash $ 1,000,000 Common shares issued 7,599,458 Warrants for common shares issued 5,475,500 Fair value of consideration transferred $ 14,074,958 Trade names and trademarks $ 4,640,000 Technology 340,000 Customer relationships 560,000 Goodwill 8,534,958 Total purchase price allocation $ 14,074,958 MoviePass Films On May 23, 2018 the Company entered into the LOI with EFO, pursuant to which EFO acquired a 49% membership interest in MoviePass Films. Pursuant to the LOI, the Company capitalized MoviePass Films with an initial capital contribution of $2,000,000 in cash and retained a 51% interest in MoviePass Films. EFO has assigned its rights in a film output agreement of EFO to MoviePass Films. MoviePass Films has begun operations, and the Company and EFO are finalizing the long form agreements that will further define the relative rights and duties of the Company and EFO with respect to MoviePass Films. In accordance with the LOI as of June 30, 2018, the Company is committed to contribute to MoviePass Films an additional $3,000,000 in cash and 16,000 (4,000,000 pre-split) shares for the acquisition of ownership and economic interests in films. The Company has not performed the valuation studies required to value film output agreement assigned to MoviePass Films by EFO. The Company has a 51% membership interest in MoviePass Films and the right to designate three out of five of the members of its board of managers and accordingly has consolidated the results of MoviePass Films with those of the Company. |
Net Income_(Loss) Per Share Att
Net Income/(Loss) Per Share Attributable to Common Stockholders | 6 Months Ended |
Jun. 30, 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 ASC. 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 following table shows the outstanding dilutive common shares excluded from the diluted net loss per share attributable to common stockholder’s calculation as they were anti-dilutive: June 30, December 31, 2018 2017 Warrants 66,821 38,526 Conversion features on convertible notes 336,425 5,482 Total potentially dilutive shares 403,246 44,008 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 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 as of June 30, 2018 and December 31, 2017: June 30, December 31, 2017 Vendor deposits $ 8,083,907 $ 147,533 Tax - 108,433 Deposits - 230,711 Insurance 78,719 86,181 Professional fees and services 93,571 33,333 Deferred stock compensation 464,335 2,885,278 Rent - 52,650 Other 642,223 13,692 Total prepaid expenses and other current assets $ 9,362,755 $ 3,557,811 |
Intangible Assets, net and Good
Intangible Assets, net and Goodwill | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets, net and Goodwill [Abstract] | |
Intangible Assets, net and Goodwill | 8. Intangible Assets, net and Goodwill The following table sets forth the major categories of the Company’s intangible assets and the estimated useful lives as of June 30, 2018 and December 31, 2017 for those assets that are not already fully amortized: June 30, 2018 Useful Life (Years) Gross Acquisitions Accumulated Amortization Impairments Net Book Value Customer relationships 7 $ 2,560,000 $ 560,000 $ (222,613 ) $ - $ 2,897,387 Technology 3 8,070,000 340,000 (3,071,620 ) - 5,338,380 Tradenames and trademarks 10-20 19,873,224 4,640,000 (1,466,836 ) - 23,046,388 Broker relationships 5 - - - - - Patents 12 196,353 - (16,262 ) - 180,091 $ 30,699,577 $ 5,540,000 $ (4,777,331 ) $ - $ 31,462,246 December 31, 2017 Estimated Gross 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 10 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 $1,357,467 and $426,651 for the three months ended June 30, 2018 and 2017, respectively, and $2,613,574 and $853,302 for the six months ended June 30, 2018 and 2017, respectively. The following table outlines estimated future annual amortization expense for the next five years and thereafter: June 30, Remaining 2018 $ 2,726,155 2019 5,246,717 2020 3,957,471 2021 2,678,569 2022 2,648,976 Thereafter 14,204,358 $ 31,462,246 Goodwill represents the difference between purchase cost and the fair value of net assets acquired in business acquisitions. Goodwill and indefinite lived intangible assets are tested for impairment annually as of December 31 st Balance as of December 31, 2017 $ 79,137,177 Acquisitions 8,534,958 Impairments - Balance as of June 30, 2018 $ 87,672,135 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jun. 30, 2018 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Accounts Payable and Accrued Expenses | 9. Accounts Payable and Accrued Expenses As of June 30, 2018 and December 31, 2017, accounts payable and accrued expenses consisted of the following: June 30, 2018 December 31, 2017 Accounts payable $ 5,619,294 $ 5,087,060 Accrued ticket expense 7,177,764 4,743,582 Accrued professional fees 1,084,624 597,187 Accrued credit card fees - 782,670 Accrued payroll expense 1,341,900 312,149 Accrued other expense 4,773,922 852,840 Accrued interest 1,265,087 768,515 Total $ 21,262,591 $ 13,144,003 |
Senior Secured Convertible Note
Senior Secured Convertible Notes and Warrants and Unit Offerings | 6 Months Ended |
Jun. 30, 2018 | |
Senior Secured Convertible Notes and Warrants and Unit Offerings [Abstract] | |
Senior Secured Convertible Notes and Warrants and Unit Offerings | 10. Senior Secured Convertible Notes and Warrants and Unit Offerings February 2017 Notes 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 principal balance of $681,818 of the February 2017 Notes was accounted for as an original issuance discount and accreted into interest expense over the life of the February 2017 Notes. As cash is received from the February 2017 Investor Note, and the related principal amount of the February 2017 Notes increases accordingly, a derivative liability related to the conversion feature embedded within the February 2017 Notes is recorded as a debt discount, and accreted into interest expense over the life of the February 2017 Notes using the effective interest method, and any excess value over the amount of cash received is expensed immediately to interest expense. In addition, February Placement Agent Warrants were also issued (See The Placement Agent Notes and Warrants below As of December 31, 2017, the Investor had fully funded the February 2017 Investor Note and had subsequently converted the aggregate principal amount due under the February 2017 Notes and approximately $49,000 of interest into 7,411 (1,852,886 pre-split) 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 and six months ended June 30, 2017, the Company had interest expense of $81,023 and $131,213, respectively. 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 3,365 (841,250 pre-split) 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 was in a 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 was 3,365 (841,250 pre-spilt). 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 $1,125 ($4.50 pre-split), 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) $1,125 ($4.50 pre-split) and (ii) the greater of (I) $1,000 ($4.00 pre-split) 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) $750 ($3.00 pre-split) 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 $750 ($3.00 pre-split) through October 4, 2017 and $125 ($0.50 pre-split) 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 3,789 (947,218 pre-split) shares of common stock (the “New Exchange Shares”) and rights (the “Rights”) to receive 2,211 (552,782 pre-split) 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, valued at $19,950,000 based on the trading price of the Company’s stock on the date of the Third Exchange Agreement and recorded as interest expense. August 2017 Notes 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 7,572 (1,892,972 pre-split) shares of the Company’s common stock at an exercise price of $812.50 ($3.25 pre-split) 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 had a maturity date of April 16, 2018 and the Investor Warrant had an expiration date of 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, which was determined to be a liability, 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 initial principal balance was recorded as a debt discount and 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 included an Initial Series A Note, an Additional Series A Note and the Series B Note, were $1,000 ($4.00 pre-split) for the Initial Series A Note and the Additional Series A Note and $750 ($3.00 pre-split) for the Series B Note. As of December 31, 2017, the Investor had fully prepaid the August 2017 Investor Note and converted $5,794,560 in principal amount, plus accrued interest, of the August 2017 Notes into 5,931 (1,482,639 pre-split) shares of the Company’s common stock. 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 and six months ended June 30, 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 4,678 (1,169,475 pre-split) shares of the Company’s common stock on February 20, 2018. As of June 30, 2018, the unpaid principal amount of the August 2017 Notes owed to the Investor was $0. 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”) in September 2017. Because the Exchange Note had a conversion price of $750 ($3.00 pre-split) per share, which was lower than the Investor Warrant per share exercise price of $812.50 ($3.25 pre-split), the number of shares of the Company’s common stock issuable to the Investor pursuant to the Investor Warrant was increased from 7,572 (1,892,972 pre-split) to 8,203 (2,050,720 pre-split) and the per share exercise price of the Investor Warrant was decreased from $812.50 ($3.25 pre-split) to $750 ($3.00 pre-split). As of December 31, 2017, the Investor had elected, in a cashless transaction, to exercise the Investor Warrant to purchase 6,860 (1,715,006 pre-split) shares of common stock and also paid the Company the sum of $977,142 to exercise the Investor Warrant for an additional 1,303 (325,714 pre-split) shares of common stock. On November 21, 2017 in conjunction with the Fourth Amendment and Exchange Agreement entered into between the Investor and the Company, the remaining 40 (10,000 pre-split) shares of common stock subject to the Investor Warrant were exchanged for a new warrant (the “Exchange Warrant”). The Exchange Warrant, which was determined to be a liability and was recorded at fair value, was in substantially the form of the Investor Warrant, except that: ● The Exchange Warrant had an exercise price of $3,578 ($14.31 pre-split). ● The expiration date of the Exchange Warrant was November 21, 2022. ● The Exchange Warrant could 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 was subject to redemption, refund or alternate cashless exercise after the August Note was no longer outstanding (or on or after February 16, 2018 if the Company failed to remain current in its filings or an event of default under the August 2017 Notes occurred). In March 2018, the Investor exercised the Exchange Warrant by means of a cashless exercise into 17,414 (4,353,581 pre-split) 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. 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 was calculated as $12,878,864 and recorded as interest expense. November 2017 Notes 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 2017 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”). As cash is received from the November 2017 Investor Note, and the related principal amount of the November 2017 Notes increases accordingly, a derivative liability related to the conversion feature and Make-Whole Interest feature embedded within the November 2017 Notes is recorded as a debt discount and accreted into interest expense over the life of the November 2017 Notes using the effective interest method, and any excess value over the amount of cash received is expensed immediately to interest expense. In addition, November Placement Agent Warrants are also issued (See The Placement Agent Notes Warrants 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. On January 2, 2018, an additional $646,263 of interest was capitalized and added to the principal balance of the November 2017 Notes and on January 26, 2018, investors redeemed principal of $2,894,062 in exchange for cash. On April 2, 2018, an additional $1,028,730 of interest was capitalized and added to the principal balance of the note. As of June 30, 2018, the entire capitalized balance was converted to shares of the Company’s common stock and the outstanding balance owed on the capitalized Make-Whole Interest was $0. The November 2017 Notes have a maturity date of November 7, 2019. 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. The initial conversion price for the November 2017 Notes, which includes both the November Initial Note and November Additional Note, was $3,015 ($12.06 pre-split). However, the conversion price may be adjusted upon obtaining stockholder approval in accordance with Nasdaq Listing Rule 5635(d) of the issuance of our common stock at any conversion price below $3,015, which may result from full ratchet conversion price adjustments required by the November 2017 Notes in the event of certain issuances below the initial conversion price. As a result, during the second quarter of 2018, in conjunction with the April 2018 Offering and the sale of shares in the ATM Offering at prices lower than the initial conversion price, the conversion price for the November 2017 Notes has been reduced, and as of June 30, 2018 and August 13, 2018, the conversion price was $0.345 and $0.05, respectively. During the second quarter of 2018, the Company received cash payments on the November 2017 Notes of $25,077,889, of which $24,202,889 of principal and $3,704,867 of accrued interest, were converted into 235,622 (58,905,544 pre-split) shares of the Company’s common stock during the six months ended June 30, 2018. As of June 30, 2018, the outstanding principal amount of the November 2017 Notes was $875,000. For the three and six months ended June 30, 2018, the Company recognized $4,677,484 and $5,733,114 of interest expense pertaining to the November 2017 Notes and had $698,662 of accrued interest as of June 30, 2018. On June 1, 2018, the Company entered into an amendment to the securities purchase agreement between the Company and the institutional investors holding the November 2017 Notes to reduce the number of shares of common stock required to be reserved for issuance under the November 2017 Notes from 200% to 110% of the maximum number of shares of common stock issuable upon conversion of the November 2017 Notes until the earlier of the January 2018 Notes Stockholder Approval Date (as defined below) and August 1, 2018. After such date, the required reserve amount will be increased back to 200%. January 2018 Notes On January 23, 2018, pursuant to a securities purchase agreement (the “January Securities Purchase Agreement”) entered into by the Company and an institutional investor the Company sold and issued senior convertible notes in the aggregate principal amount of $60,000,000 (collectively, the “January 2018 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, and (ii) a secured promissory note payable by the buyer to the Company (the “January 2018 Investor Note”) in the aggregate principal amount of $35,000,000 which is subject to a master netting agreement between the Company and the buyer (collectively, the “January 2018 Financing”). In conjunction with the prepayment, of the January 2018 Investor Note the Company was also obligated to pay the buyer interest which would have accrued with respect to the outstanding balance for the period from the redemption date through the maturity date (the “January Make-Whole Interest”). As cash is received from the January 2018 Investor Note, and the related principal amount of the January 2018 Notes increases accordingly, a derivative liability related to the conversion feature and the January Make-Whole Interest feature embedded within the January 2018 Notes is recorded as a debt discount and any excess value over the amount of cash received is expensed immediately to interest expense. In addition, January Placement Agent Warrants were also issued (See The Placement Agent Notes and Warrants The Company elected to defer payment of the January Make-Whole Interest by capitalizing the full balance under the same terms as the original January 2018 Notes. On April 2, 2018, $352,187 of interest was capitalized and added to the principal balance of the note. As of June 30, 2018, the entire capitalized balance of $352,187 remained outstanding. Unless earlier converted or redeemed, the January 2018 Notes have a maturity date of January 23, 2020. The Series A-1 Note bears interest at a rate of 10% per annum. Upon issuance, the Series B-1 Note initially consisted entirely of “Restricted Principal” which is defined as that portion of the principal amount of a Series B-1 Note that equals the outstanding principal amount of the corresponding January 2018 Investor Note. The principal amount of the January 2018 Investor Note is subject to reduction through prepayments by the buyer of the January 2018 Investor Note given by the buyer to the Company or, upon maturity or redemption of the Series B-1 Note, by netting the amount owed by the buyer under the January 2018 Investor Note against a corresponding amount of principal to be canceled under the buyer’s Series B-1 Note. Each prepayment under the January 2018 Investor Note will convert a corresponding amount of Restricted Principal under the Series B-1 Note into “Unrestricted Principal” that may be converted into common stock. The January 2018 Notes have an initial conversion price of $2,860 ($11.44 pre-split) per share. However, pursuant to the January Securities Purchase Agreement, the Company was required to seek stockholder approval in accordance with Nasdaq Listing Rule 5635(d) of the issuance of our common stock at a conversion price per share as low as $1.83 following the occurrence of an event of default or otherwise at any conversion price below $2,860 which may result from full ratchet conversion price adjustments required by the January 2018 Notes in the event of certain issuances below the initial conversion price. Such stockholder approval was obtained on July 23, 2018. As a result, in conjunction with the April 2018 Offering and the sale of shares in the ATM Offering at prices lower than the initial conversion price, the conversion price for the January 2018 Notes has been reduced, and as of August 13, 2018, the conversion price was $0.05. The Company is required to redeem the January 2018 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 January 2018 Notes); or (iv) in the event of a Change of Control (as defined in the January 2018 Notes). With the exception of a redemption required by an Event of Default (as defined in the January 2018 Notes), 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 January 2018 Notes with cash. All amounts outstanding under the January 2018 Notes will be secured by the January 2018 Investor Note and all proceeds therefrom. The January 2018 Notes are not be secured by, and the buyer does not have a lien on, any assets of the Company other than the January 2018 Investor Note. MoviePass has guaranteed the obligations arising under the January 2018 Notes. In accordance with the terms of the January Securities Purchase Agreement, as amended, the Company was obligated to convene a special meeting of its stockholders on or prior to July 23, 2018, for the purpose of approving the issuance of all securities that may be issued in connection with the January 2018 Financing, which stockholder approval was obtained on July 23, 2018. Provided there has been no Equity Conditions Failure (as defined in the January 2018 Notes) and, as to the Series A-1 Note, no August 2017 Notes or November 2017 Notes remain outstanding, and as to the Series B-1 Note, no August 2017 Notes, November 2017 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 (as defined in the January 2018 Notes) remaining unpaid under the January 2018 Notes. The portion of the January 2018 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 January 2018 Investor Note equal to the amount of Restricted Principal included in the redemption. During the second quarter of 2018, the Company did not receive any cash payments on the January 2018 Notes, therefore, the outstanding principal balance as of June 30, 2018 is $0. For the three and six months ended June 30, 2018, the Company recognized $457,775 and $809,963 of interest expense pertaining to the January 2018 Notes and had $457,775 of accrued interest as of June 30, 2018. On June 1, 2018, the Company and the buyer entered into an amendment to the January Securities Purchase Agreement and the January 2018 Notes to reduce the number of shares of common stock required to be reserved for issuance under the January 2018 Notes from 200% to 100% of the maximum number of shares of common stock issuable upon conversion of the January 2018 Notes until the earlier of (1) the date stockholders approve resolutions providing for the issuance of the January 2018 Notes and the shares of common stock issuable upon conversion of the January 2018 Notes (the “January 2018 Notes Stockholder Approval” and the date the Stockholder Approval is obtained, the “January 2018 Notes Stockholder Approval Date”) and (2) August 1, 2018. After such date, the required reserve amount will be increased back to 200%. The amendment to the January Securities Purchase Agreement also extended the date by which the Company must hold the special meeting to obtain the January 2018 Notes Stockholder Approval from June 1, 2018 to August 1, 2018. February 2018 Units Offering On February 13, 2018, the Company sold an aggregate of approximately $105 million worth of units (the “Units”) of the Company’s securities to Canaccord Genuity Inc., on behalf of itself and as representative of the underwriters (the “Underwriters”), pursuant to which the Company issued and sold to the Underwriters in a best-efforts underwritten public offering (the “Offering”) at a purchase price of $5.192 per Unit with each Unit consisting of (A) 7,425,000 Series A-1 units (the “Series A-1 Units”), with each Series A-1 Unit consisting of (i) 0.004 (one pre-split) share of the Company’s common stock, and (ii) 0.004 (one pre-split) Series A-1 warrant to purchase 0.004 (one pre-split) share of the Company’s common stock (a “Series A-1 Warrant”); and (B) 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, 11,675,000 Series B-1 units (the “Series B-1 Units”), consisting of (i) 0.004 (one pre-split) pre-funded Series B-1 warrant to purchase 0.0004 (one pre-split) 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) 0.004 (one pre-split) Series A-1 Warrant. 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 $1,625 ($6.50 pre-split) per share of common stock. Each Series B-1 Warrant has an aggregate exercise price of $1,375 ($5.50 pre-split) per share of common stock, all of which were pre-funded except for a nominal exercise price of $0.001 per share of common stock. All Series B-1 Warrants were exercised. The Company received approximately $96.9 million in net proceeds from the sale of the Units, after deducting underwriting discounts and commissions equal to $5.9 million and estimated offering expenses of approximately $0.5 million, not taking into account any exercise of the Warrants. In addition, Palladium Capital Advisors, LLC acted as financial advisor in connection with the Offering and received a financial advisory fee equal to $1.9 million. The Warrants were recorded as liabilities and initially recorded at fair value with the residual amount received allocated to the Company’s common stock. The exercise price of and number of shares of the Company’s common stock underlying the Warrants are subject to adjustment upon the issuance by the Company of stock dividends, stock splits, and similar proportionately applied changes affecting the Company’s outstanding common stock. In addition, the Series A-1 Warrants are subject to adjustment of the applicable exercise price then in effect, if, as of December 17, 2018 (the “Adjustment Date”), the quotient determined by dividing the (x) sum of the VWAP (as defined in the Series A-1 Warrant) of the common stock for each trading day during the 10 consecutive trading day period ending and including the trading day immediately preceding the Adjustment Date, divided by (y) 0.4 (10 pre-split) (all such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period) (the “Adjustment Price”), is less than the applicable exercise price. If the Adjustment Price is less than the applicable exercise price as of the Adjustment Date, then the exercise price shall be automatically adjusted to be equal to the Adjustment Price. If the Company consummates any merger, consolidation, sale or other reorganization event in which its common stock is converted into or exchanged for securities, cash or other property (“Fundamental Transaction”), then the Company shall pay at the Warrants holder’s option, exercisable at any time commencing on the occurrence or the consummation of a Fundamental Transaction and continuing for 90 days, an amount of cash equal to the value of the remaining unexercised portion of the warrant as determined in accordance with the Black-Scholes option pricing model on the date of such Fundamental Transaction. April 2018 Units Offering On April 23, 2018, the Company sold an aggregate of approximately $30 million worth of units (the “April 2018 Units”) of the Company’s securities to Canaccord Genuity Inc., on behalf of itself and as representative of the underwriters (the “April Offering Underwriters”), pursuant to which the Company issued and sold to the April Offering Underwriters in a best-efforts underwritten public offering (the “April 2018 Offering”) at a purchase price of $2.59875 per April 2018 Unit with each April 2018 Unit consisting of (A) 10,500,000 Series A-2 units (the “Series A-2 Units”), with each Series A-2 Unit consisting of (i) 0.004 (one pre-split) share (an “April Share”) of the Company’s common stock, and (ii) 0.004 (one pre-split) Series A-2 warrant to purchase 0.004 (one pre-split) share of common stock (the “Series A-2 Warrants”); and (B) 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 April 2018 Offering, 500,000 Series B-2 units (the “Series B-2 Units”, consisting of (i) 0.004 (one pre-split) pre-funded Series B-2 warrant to purchase 0.004 (one pre-split) share of common stock (the “Series B-2 Warrants”, and together with the Series A-2 Warrants, the “April Warrants”) and (ii) 0.004 (one pre-split) Series A-2 Warrant. The April Shares, Series A-2 Warrants and Series B-2 Warrants were immediately separable. Each April Warrant is exercisable at any time on or after the issuance date until the five-year anniversary of the issuance date. Each Series A-2 Warrant is exercisable at a price of $750 ($3.00 pre-split) per share of common stock. Each Series B-2 Warrant had an aggregate exercise price of $687.5 ($2.75 pre-split) per share of common stock, all of which were pre-funded except for a nominal exercise price of $0.001 per share of common stock. All of the Series B-2 Warrants were exercised. The Company received approximately $27.5 million in net proceeds from the sale of the April 2018 Units, after deducting underwriting discounts and commissions equal to $1.7 million and estimated offering expenses of approximately $1.0 million, not taking into account any exercise of the April Warrants. In addition, Palladium Capital Advisors, LLC acted as financial advisor in connection with the April 2018 Offering and received a financial advisory fee equal to $0.6 million The April Warrants were recorded as liabilities and initially recorded at fair value with the residual amount received allocated to the Company’s common stock. The exercise price of and number of shares of common stock underlying the April Warrants are subject to adjustment upon the issuance by the Company of stock dividends, stock splits, and similar proportionately applied changes affecting the Company’s outstanding common stock. The Series A-2 Warrants also include “full ratchet” anti-dilution protection provisions (the “Full Ratchet Adjustment”), which provide that if the Company issues any shares of common stock at a price less than the then current exercise price of the Series A-2 Warrants, or if the Company issues any securities convertible into, or exercisable, or exchangeable for, shares of common stock with an exercise or conversion price less than the then current exercise price of the Series A-2 Warrants, then the exercise price of the Series A-2 Warrants will automatically be reduced to the issuance price of the new shares of common stock or the exercise or conversion price of the April Warrants, options or other convertible or exchangeable securities. The Full Ratchet Adjustment does not apply if the Company issues “Excluded Securities”, including certain (i) option and other equity incentive awards approved by the Company’s board of directors to be issued to directors, officers, consultants and employees, (ii) shares of common stock issuable pursuant to existing employment agreements, (iii) shares of common stock issued upon conversion or exercise of convertible securities that were previously issued, (iv) shares of common stock issued pursuant to strategic license agreements, mergers or acquisitions (but does not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital), (v) shares of common stock issued under the ATM Offering after the fifteenth calendar day that the Series A-2 Warrants were issued and (vi) 2,000 ( 500,000 pre-split) If the Company consummates any merger, consolidation, sale or other reorganization event in which its common stock is converted into or exchanged for securities, cash or other property (“fundamental transaction”), then the Company shall pay at the holder’s option, exercisable at any time commencing on the occurrence or the consummation of a fundamental transaction and continuing for 90 days, an amount of cash equa |
Common and Preferred Stock
Common and Preferred Stock | 6 Months Ended |
Jun. 30, 2018 | |
Common and Preferred Stock [Abstract] | |
Common and Preferred Stock | 11. Common and Preferred Stock Common Stock On February 5, 2018, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 500,000,000 shares (the “Charter Amendment”). Following stockholder approval of the Charter Amendment, a Certificate of Amendment to the Company’s Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on February 8, 2018, at which time the Charter Amendment became effective. On July 23, 2018, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 500,000,000 to 5,000,000,000 shares and to increase the total number of authorized shares of capital stock from 502,000,000 to 5,002,000,000 (the “Authorized Share Increase”), of which 2,000,000 shares with a par value of one cent ($0.01) per share shall be designated as “Preferred Stock” and 5,000,000,000 shares with a par value of one cent ($0.01) per share shall be designated as “Common Stock.” Following the stockholder approval, a Certificate of Amendment to the Company’s Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 23, 2018, at which time the Authorized Share Increase became effective. Preferred Stock On June 25, 2018, the Company filed an amended Certificate of Incorporation in the State of Delaware to designate 20,500 shares of preferred stock as the Preferred Stock. The following is a description of the Preferred Stock: Dividends The Preferred Stock does not accrue dividends. Conversion The Preferred Stock is not convertible into common stock. Voting Rights Each share of Preferred Stock is entitled to 3,205 votes per share on all matters on which holders of common stock are entitled to vote. However, the amount of votes with respect to the Preferred Stock held by any holder, when aggregated with any other voting securities of the Company held by such holder, cannot exceed 19.9% of the Company’s outstanding voting power calculated as of June 21, 2018 (or such greater percentage allowed by Nasdaq without any stockholder approval requirements). Redemption From and after the time when the first 15% of the aggregate principal amount of any June 2018 Convertible Notes is paid or converted in accordance with the terms of the June 2018 Convertible Notes, the Company will have the right to redeem all or a portion of the Preferred Stock at a price per share equal to $0.01, payable, at the Company’s option with cash or shares of common stock or, if required by certain beneficial ownership limitations, rights to receive common stock. Transfer The shares of Preferred Stock are transferable, subject to limitations, as defined, and applicable securities laws. Liquidation Preference Upon any liquidation, dissolution or winding up of the Company, the holders of the shares of Preferred Stock will be entitled to receive in cash out of the assets of the Company, before any amount is paid to the holders of any junior stock, including common stock of the Company, an amount per share of Preferred Stock equal to 100% of the stated value per share (which is equal to $1,000) plus $0.01. The Certificate of Designations also includes covenants restricting the Company’s ability to take certain actions without the approval of at least a majority of the outstanding shares of the Preferred Stock. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis | 6 Months Ended |
Jun. 30, 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 | 12. 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 June 30, 2018 and December 31, 2017: Amount at Fair Value Measurement Using Fair Value Level 1 Level 2 Level 3 June 30, 2018 Liabilities Derivative liability – warrants $ 4,266,100 $ - $ - $ 4,266,100 Derivative liability – conversion feature 41,537,054 - - 41,537,054 Total $ 45,803,154 $ - $ - $ 45,803,154 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 six months ended June 30, 2018: Amount Balance at December 31, 2017 $ 72,123,262 Issuances to Debt Discount 65,341,847 Issuances to Interest Expense 25,503,629 Reclass from APIC to derivative- Feb Offering 158,944,798 Reclass from APIC to Derivative- April Offering 33,997,600 Warrants issued in acquisiton of moviefone 5,475,500 Gain on Exchange of Warrants (301,487 ) Settlement of Warrant Liability for March Warrant Exchange (12,894,165 ) Settlement of Warrant Liability for June Warrant Exchange (5,202,100 ) Gain on march exchange (cash paid) (781,195 ) Conversion to paid in capital (78,311,704 ) Gain/Loss on Extinguishment (15,007,699 ) Change in FMV Warrant (189,840,088 ) Change in FMV Derivatve (13,245,044 ) Balance at June 30, 2018 $ 45,803,154 The fair value of the derivative conversion features and warrant liabilities as of June 30, 2018 and December 31, 2017 were calculated using a Monte Carlo option model valued with the following weighted average assumptions: June 30, 2018 December 31, 2017 Amount Amount Dividend yield 0% 0% Expected volatility 145% - 160% 45% - 270% Risk free interest rate 2.18% - 2.72% 1.06% - 2.20% Contractual term (in years) 1.36 - 5.00 0.19 - 5.00 Exercise price $0.25 - $3,015 $0.25 - $3,577.50 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. At any given time, certain of the Company’s embedded conversion features on debt and outstanding warrants may be treated as derivative liabilities for accounting purposes under ASC 815-40 due to insufficient authorized shares to settle these outstanding contracts. |
Stock Based Compensation
Stock Based Compensation | 6 Months Ended |
Jun. 30, 2018 | |
Stock Based Compensation [Abstract] | |
Stock Based Compensation | 13. 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 12,000 (3,000,000 pre-split) 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) 12,000 (3,000,000 pre-split) 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 10,440 (2,610,000 pre-split) shares of common stock remained available for issuance as of June 30, 2018. As of June 30, 2018 there have not been any stock option grants made pursuant to the 2014 Plan. From time to time the Board of Directors has also authorized the issuance of shares of common stock outside of the 2014 Plan to consultants and employees for services rendered. During the three and six months ended June 30, 2018 the Company awarded 1,927 (481,750 pre-split) and 2,027 (506,750 pre-split) shares, respectively, to consultants who provided services to the Company. In connection with such awards (including awards granted in 2017) the Company recorded stock compensation expense of $1,911,144 and $5,681,161 which is included in selling, general and administrative expenses for the three and six months ended June 30, 2018, respectively. Unamortized stock compensation costs related to these awards at June 30, 2018 of $482,521 will be recognized over the anticipated service period during the balance of 2018. The Company issued 2,000 (500,000 pre-split) and 4,809 (1,202,167 pre-split) shares of common stock to employees and consultants for services provided during 2017 during the three and six months ended June 30, 2018, respectively. The Company recognized expense in 2017 of $15,631,605, with respect to such awards, and also recorded a liability on the balance sheet at December 31, 2017, related to these costs which were settled in shares. 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 six months ended June 30, 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 six months ended June 30, 2018 MoviePass granted 39,809,175 stock options at an exercise price of $0.43 per share. The following table summarizes stock option activity under the MoviePass share-based plan for the six months ended June 30, 2018: Weighted Average Options for Remaining Aggregate Common Shares Exercise Price Contractual Term Intrinsic Value Outstanding as of December 31, 2017 28,219,464 $ 0.14 9.13 $ 8,313,684 Granted 39,809,175 $ 0.43 Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of June 30, 2018 68,028,639 $ 0.31 9.18 $ 1,531,009 Vested and exercisable at June 30, 2018 22,318,253 $ 0.18 8.74 $ 1,032,565 The weighted average grant date fair value per share of stock options granted during the six months ended June 30, 2018 was $0.16. No options were exercised during the six months ended June 30, 2018. The Company recognized share-based payment expense associated with stock options of $1,090,932 and $3,087,244 for the three and six months ended June 30, 2018, respectively. The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees: Six Months Ended June 30, 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 six months ended June 30, 2018. |
Concentration of Credit Risk
Concentration of Credit Risk | 6 Months Ended |
Jun. 30, 2018 | |
Concentration of Credit Risk [Abstract] | |
Concentration of Credit Risk | 14. Concentration of Credit Risk Consulting For the three months ended June 30, 2018 and June 30, 2017, respectively, 4 customers accounted for 93.5% and 4 customers accounted for 92.8% of consulting revenues. For the six months ended June 30, 2018 and June 30, 2017, respectively, 4 customers accounted for 93.9% and 4 customers accounted for 87.3% of consulting revenues. As of June 30, 2018 and December 31, 2017, respectively, 5 customers accounted for 87.4% and 4 customers accounted for 62.6% of consulting accounts receivables. As of June 30, 2018 and December 31, 2017, respectively, 3 vendors accounted for 93.4% and 3 vendors accounted for 82.7% of consulting accounts payables. Technology As of June 30, 2018 and December 31, 2017, respectively, 4 vendor accounted for 69.1% and 3 vendors accounted for 60.8% of technology accounts payables. Subscription and Marketing and Promotional Services As of June 30, 2018 and December 31, 2017, respectively, 1 customer accounted for 82.4% of subscription and marketing and promotional services accounts receivables and 2 customers accounted for 100.0% for subscription and marketing and promotional services accounts receivables. As of June 30, 2018 and December 31, 2017, respectively, 2 vendors accounted for 39.3% subscription and marketing and promotional services accounts payables and 1 vendor accounted for 41.0% of subscription and marketing and promotional services accounts payables. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies The Company’s operating lease commitments as of June 30, 2018 are comprised of the following: Payments due by period Less than 1 year $ 148,049 1 to 3 years 780,798 3 to 5 years 115,753 Thereafter - Total $ 1,044,600 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 leases office space at 444 Brickell Avenue, Miami Florida with a term expiring on April 30, 2020. As of June 30, 2018 MoviePass leased space at WeWork on a month to month basis at 175 Varick Street New York, NY 10014. As of August 1, 2018 MoviePass has relocated to WeWork at 135 Madison Avenue New York, NY 10016 under a one-year lease agreement effective July 9, 2018. 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. Rent expense for the three months ended June 30, 2018 and 2017 was approximately $247,743 and $86,217, respectively, and $461,088 and $134,017 for the six months ended June 30, 2018 and 2017, 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 June 30, 2018, the Company does not have any “Off Balance Sheet Arrangements”. Legal Proceeding On August 2, 2018, Jeffrey Chang, a purported stockholder of the Company, acting on behalf of himself and a putative class of persons who purchased or otherwise acquired the Company’s common stock between August 15, 2017, and July 26, 2018, filed a class action complaint in the U.S. District Court for the Southern District of New York against the Company and two of its executive officers, Theodore Farnsworth and Stuart Benson (the “August 2, 2018 Complaint”). Jeffrey Chang v. Helios and Matheson Analytics Inc., et. al., Case No. 1:18-cv-6965. The August 2, 2018 Complaint alleges, among other things, that the Company’s statements to the market were materially false or misleading. The plaintiffs assert claims under Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5. On August 13, 2018, Jeffrey Braxton, a purported stockholder of the Company, acting on behalf of himself and a putative class of persons who purchased or otherwise acquired the Company’s common stock between August 15, 2017, and July 26, 2018, filed a class action complaint in the U.S. District Court for the Southern District of New York against the Company and two of its executive officers, Theodore Farnsworth and Stuart Benson (the “August 13, 2018 Complaint”). Jeffrey Braxton v. Helios and Matheson Analytics, Inc. et al., Case No. 1:18-cv-07242-UA. The August 13, 2018 Complaint makes substantially identical allegations as the August 2, 2018 Complaint. The Company intends to vigorously defend these matters and believes that they are without merit. Given the preliminary status of the litigation, it is difficult to predict the likelihood of an adverse outcome or estimate the amount or range of any reasonably possible losses, if any. |
Transactions with Related Parti
Transactions with Related Parties | 6 Months Ended |
Jun. 30, 2018 | |
Transactions with Related Parties [Abstract] | |
Transactions with Related Parties | 16. Transactions with Related Parties Gadiyaram Agreements 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 for 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. The amount payable to Mr. Gadiyaram as of June 30, 2018 was approximately $18,750. On May 22, 2018, the Company and Helios and Matheson Information Technology, Ltd (“HMIT”), an Indian corporation, owned and controlled by Mr. Muralikrishna Gadiyaram, a director of the Company executed a letter agreement whereby HMIT agreed not to sell HMNY shares held by HMIT until after April 15, 2019 (the “Lockup Agreement”). In exchange for such Lockup Agreement the Company agreed to issue to HMIT 2,000 (500,000 pre-split) shares of HMNY stock. As of June 30, 2018, the shares issuable to HMIT had not yet been issued and accordingly, the Company accrued $225,000 with respect thereto, representing the value of the shares on May 22, 2018. |
Provision for Income Taxes
Provision for Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Provision for Income Taxes [Abstract] | |
Provision for Income Taxes | 17. Provision for Income Taxes The Company had a tax provision for the three months ended June 30, 2018 and 2017 of $28,719 and $11,373, respectively, and $36,670 and $41,857 for the six months ended June 30, 2018 and 2017, respectively. Tax for both the six months ended June 30, 2018 and 2017 was comprised of minimum state taxes and a provision for tax in respect to taxes incurred by the Company’s Indian subsidiary. The Company’s provision for income taxes for the six months ended June 30, 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 six months ended June 30, 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 June 30, 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 | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | 18. 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 and six months ended June 30, 2018, the Company reported three segments. The Company allocates corporate expenses to the segments for purposes of individually measuring operating segments. Corporate expenses are allocated on the basis of each segment’s relative earnings prior to the allocation. 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 and six months ended June 30, 2018 and 2017: Three Months Ended Six Months Ended 2018 2017 2018 2017 Consulting Revenue $ 829,606 $ 1,140,951 $ 1,669,109 $ 2,499,013 Cost of revenue 681,577 917,564 1,392,771 2,023,049 Gross profit 148,029 223,387 276,338 475,964 Total operating expenses 5,743,072 1,349,482 14,160,984 4,663,029 Loss from operations (5,595,043 ) (1,126,095 ) (13,884,646 ) (4,187,065 ) Total other income/(expense) 42,975,245 (2,449,557 ) 124,685,936 (4,541,120 ) Provision for income taxes (5,219 ) 72,341 (1,043 ) 41,857 Total net income (loss) $ 37,374,983 $ (3,503,311 ) $ 110,800,247 $ (8,686,328 ) Technology Revenue $ - $ - $ - $ - Cost of revenue - - - - Gross profit - - - - Total operating expenses 937,343 1,617,804 2,070,791 2,915,354 Loss from operations (937,343 ) (1,617,804 ) (2,070,791 ) (2,915,354 ) Total other income/(expense) 17,031 (16,987 ) 59 (33,975 ) Provision for income taxes - - - - Total net loss $ (920,312 ) $ (1,634,791 ) $ (2,070,732 ) $ (2,949,329 ) Subscription and Marketing and Promotional Services Revenue $ 73,339,128 $ - $ 121,942,485 $ - Cost of revenue 178,085,142 - 313,342,924 - Gross profit (104,746,014 ) - (191,400,439 ) - Total operating expenses 15,360,459 - 27,014,976 - Loss from operations (120,106,473 ) - (218,415,415 ) - Total other income/(expense) - - - - Provision for income taxes (23,500 ) - (35,627 ) - Total net loss $ (120,129,973 ) $ - $ (218,451,042 ) $ - As of June 30, 2018 As of December 31, 2017 Consulting Cash and cash equivalents $ 10,998,366 $ 569,886 Accounts receivable $ 311,381 $ 332,753 Prepaid expenses and other current assets $ 835,212 $ 3,382,127 Property and equipment $ 152,415 $ 96,464 Intangible assets $ 4,897,504 $ - Goodwill $ - $ - Deposits and other assets $ 128,625 $ 129,119 Accounts payable and accrued expenses $ 3,600,737 $ 2,088,867 Liabilities to be settled in stock $ 5,669,263 $ 20,875,045 Convertible notes payable $ 311,705 $ 3,611,627 Warrant liability $ 4,266,100 $ 67,288,800 Derivative liability $ 41,537,054 $ 4,834,462 Technology Cash and cash equivalents $ 2,577,138 $ 21,933,765 Prepaid expenses and other current assets $ 8,333 $ 21,666 Property and equipment $ 86,562 $ 95,301 Intangible assets, net $ 2,108,287 $ 2,829,295 Goodwill $ - $ - Deposits and other assets $ 10,053 $ 10,052 Accounts payable and accrued expenses $ 112,418 $ 607,622 Liabilities to be settled in stock $ 319,100 $ 445,660 Subscription and Marketing and Promotional Services Cash and cash equivalents $ 1,937,306 $ 2,445,742 Accounts receivable $ 28,340,358 $ 27,137,466 Prepaid expenses and other current assets $ 8,519,210 $ 154,018 Property and equipment $ 130,553 $ 42,270 Intangible assets, net $ 29,353,959 $ 25,707,487 Goodwill $ 87,672,136 $ 79,137,177 Deposits and other assets $ 70,814 $ 8,000 Contract costs $ 2,052,882 $ - Accounts payable and accrued expenses $ 17,549,436 $ 10,447,514 Deferred revenue $ 65,371,837 $ 54,425,630 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. Subsequent Events Waiver Agreements On July 10, 2018, the Company entered into a Waiver Agreement (the “Waiver Agreement”) with a holder of the November 2017 Notes, January 2018 Notes and June 2018 Convertible Notes (collectively, the “Existing Notes”). Pursuant to the Waiver Agreement, such holder, in its capacity as the Required Holder under the Securities Purchase Agreements pursuant to which the Existing Notes were issued: (i) waived any obligation by the Company to effect any redemption of the Existing Notes as a result of the consummation of a proposed public offering of securities by the Company (the “New Proposed Offering”), (ii) reduced the aggregate number of shares required to be reserved for issuance upon conversion of the November 2017 Notes and the January 2018 Notes, (iii) deferred the right that the holders of the Existing Notes may have to adjust the Conversion Price (as defined in the applicable Existing Note) of such Existing Notes solely as a result of the issuance of securities in the New Proposed Offering until the fourth trading day after the time of the pricing of the New Proposed Offering, (iv) consented to the New Proposed Offering, and (v) waived any prohibition with respect to the issuance of the securities in the New Proposed Offering. On July 13, 2018, the Company entered into an amendment (the “Amendment”) to the Waiver Agreement. The Amendment revised the Waiver Agreement as follows: (i) the waiver of the Company’s obligation to effect any redemption of the Existing Notes as a result of the consummation of a New Proposed Offering (as defined in the Waiver Agreement) applies only to the extent the redemption right arises from the occurrence of a Financing (as defined in the June 2018 Convertible Notes) occurring between July 11, 2018 and July 17, 2018; (ii) the number of shares permitted to be offered in the New Proposed Offering was reduced; (iii) the number of shares required to be reserved for issuance upon conversion of the November 2017 Notes was increased; (iv) the reduction in the number of shares required to be reserved upon conversion of the November 2017 Notes (the “Reduction Shares”) ends when stockholders approve either an increase in the authorized shares of common stock or a reverse stock split of the common stock, and if the Reduction Shares are not issued prior to close of market on July 17, 2018, the Reduction Shares that were not issued would be restored to (and increase) the reserve for the November 2017 Notes; and (v) the deferral of the right that the holders of the Existing Notes may have to adjust the Conversion Price (as defined in the applicable Existing Note) of such Existing Notes solely as a result of the issuance of securities in the New Proposed Offering until the fourth trading day after the time of the pricing of the New Proposed Offering provided in the Waiver Agreement was eliminated. July 13, 2018 Demand Note On July 13, 2018 the Company issued a demand note (the “July 13 Demand Note”) in the principal amount of $6,806,850, which included $5.0 million in cash borrowed by the Company from the holder and $1,806,850 required to be paid by the Company to the holder pursuant to a partial redemption of the June 2018 Convertible Notes held by the holder. The July 13 Demand Note bore interest on the unpaid principal amount at the rate of 10.0% per year. The holder could make a demand for full payment of the July 13 Demand Note from and after July 17, 2018. All proceeds received by the Company under its outstanding ATM Offering must be used to repay the July 13 Demand Note. The July 13 Demand Note and all accrued interest may be prepaid by the Company without penalty. With the agreement of the holder, principal and interest accrued on the July 13 Demand Note could be applied to all, or any part, of the purchase price of securities to be issued upon the consummation, after July 13, 2018, of an offering of securities by the Company to the holder. Any amount of principal or other amounts due which is not paid when due would result in a late charge being incurred and payable by the Company to the holder in an amount equal to interest on such amount at the rate of 15% per year from the date such amount was due until the same is paid in full. The $5.0 million cash proceeds received from the July 13 Demand Note were used by the Company to pay the Company’s merchant and fulfillment processors. MoviePass executed a guaranty (the “MoviePass July 13 Demand Note Guaranty”) pursuant to which MoviePass guaranteed the punctual payment of the July 13 Demand Note, including, without limitation, all principal, interest and other amounts that accrue after the commencement of any insolvency proceeding of the Company or MoviePass, whether or not the payment of such interest and/or other amounts are enforceable or are allowable and agreed to pay any and all costs and expenses (including counsel fees and expenses) incurred by the holder in enforcing any rights under the MoviePass July 13 Demand Note Guaranty or the July 13 Demand Note. On July 31, 2018, the Company paid in full the $6.8 million outstanding under the July 13 Demand Note. Stockholders Special Meeting On July 23, 2018, the Company held a special meeting of stockholders, whereby, the following was approved: ● the January 2018 Notes Stockholder Approval; ● an amendment to the Company’s Certificate of Incorporation to effect the Authorized Share Increase; ● an amendment of the Company’s Certificate of Incorporation to effect the Reverse Stock Split; and ● the adjournment of the special meeting, if necessary, to solicit votes on the above proposals if sufficient votes to pass the proposals were not received in time for the special meeting. Reverse Stock Split On July 23, 2018, the Board of Directors approved the Reverse Stock Split and the filing of a Certificate of Amendment to the Certificate of Incorporation of the Company to effectuate the Reverse Stock Split. A Certificate of Amendment to the Certificate of Incorporation authorizing the Reverse Stock Split was filed with the Secretary of State of the State of Delaware on July 24, 2018, and the Reverse Stock Split became effective in accordance with the terms of the Certificate of Amendment on July 24, 2018. The Reverse Stock Split did not affect the number of authorized shares of common stock, which (following the Authorized Share Increase) is 5,000,000,000 shares. A proportionate adjustment was made to (i) the per share exercise price and the number of shares issuable upon the exercise or conversion of the Company’s outstanding equity awards, options and warrants to purchase shares of common stock and outstanding convertible notes and (ii) the number of shares reserved for issuance pursuant to the Company’s 2014 Equity Incentive Plan. Fractional shares were not issued as a result of the Reverse Stock Split; instead, the Board of Directors, determined to effect an issuance of shares to holders that would otherwise be entitled to a fractional share such that any fractional shares were rounded up to the nearest whole number. July 27, 2018 Demand Note On July 27, 2018, the Company issued a demand note (the “July 27 Demand Note”) in the principal amount of $6,200,000, which included $5.0 million in cash borrowed by the Company from the holder and $1.2 million of original issue discount. The holder could make a demand for full payment of the July 27 Demand Note from and after (x) with respect to up to $3,100,000 of the principal outstanding under the July 27 Demand Note (the “Initial Principal”), August 1, 2018 or (y) with respect to any other amounts then outstanding under the July 27 Demand Note, August 5, 2018. All proceeds received by the Company on or after July 31, 2018 from sales of common stock under its outstanding the ATM Offering must be applied against any Initial Principal until no Initial Principal remains outstanding, and thereafter, against any remaining amounts due under the July 27 Demand Note. The July 27 Demand Note’s principal, together with accrued and unpaid late charges could be prepaid by the Company without penalty. With the agreement of the holder, principal and accrued and unpaid late charges on the July 27 Demand Note could be applied to all, or any part, of the purchase price of securities to be issued upon the consummation, after July 27, 2018, of an offering of securities by the Company to the holder. Any amount of principal or other amounts due which is not paid when due (a “Payment Default”) would result in a late charge being incurred and payable by the Company to the holder in an amount equal to interest on such amount as the rate of 15% per year from the date such amount was due until the same was paid in full. If a Payment Default remained outstanding for a period of 48 hours, the holder could require the Company to redeem all or a portion of the July 27 Demand Note at a redemption price of 130%. The $5.0 million cash proceeds received from the July 27 Demand Note were used by the Company to pay the Company’s merchant and fulfillment processors. If the Company is unable to make required payments to its merchant and fulfillment processors, the merchant and fulfillment processors may cease processing payments for MoviePass, which would cause a MoviePass service interruption. Such a service interruption occurred on July 26, 2018. Such service interruptions could have a material adverse effect on MoviePass’ ability to retain its subscribers. This would have an adverse effect on the Company’s financial position and results of operations. MoviePass executed a guaranty (the “MoviePass July 27 Demand Note Guaranty”) pursuant to which MoviePass guaranteed the punctual payment of the July 27 Demand Note, including, without limitation, all principal, interest and other amounts that accrue after the commencement of any insolvency proceeding of the Company or MoviePass, whether or not the payment of such interest and/or other amounts are enforceable or are allowable, and agreed to pay any and all costs and expenses (including counsel fees and expenses) incurred by the holder in enforcing any rights under the MoviePass July 27 Demand Note Guaranty or the July 27 Demand Note. On July 31, 2018, the Company paid in full the $6.2 million outstanding under the July 27 Demand Note. Common Stock and Debt Securities From June 30, 2018 through August 9, 2018 the Company has sold 232.4 million shares and received net proceeds of $50.2 million under the ATM Offering. On July 2, 2018, the Company’s second universal shelf registration was declared effective under which it may offer for sale up to $1.2 billion of equity or debt securities. In addition, from June 30, 2018 through August 9, 2018, the Company received gross cash proceeds of approximately $31.4 million with respect to funding under the November 2017 and January 2018 investor notes and issued 266.6 million shares with respect to the conversion of its November 2017 Notes and January 2018 Notes. The Company used the proceeds from the prepayments of the investor notes to redeem approximately $22.8 million of the unrestricted principal of its June 2018 Convertible Notes. As a result of such redemptions, as of August 9, 2018, there is approximately $2.4 million unrestricted principal (including certain make-whole interest) outstanding under the June 2018 Convertible Notes. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition ASC 606 Revenue from Contracts with Customers (“ASC 606”) 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 605. 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 Six Months Ended 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Consulting $ 829,606 $ 1,140,951 $ 1,669,109 $ 2,499,013 Subscription 72,403,640 - 119,566,087 - Marketing and promotional services 935,488 - 2,376,398 - Total revenues $ 74,168,734 $ 1,140,951 $ 123,611,594 $ 2,499,013 The following is a description of the principal activities from which the Company generates revenue, including from consulting customers and subscribers. 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 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 subscription services can be used by 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. Marketing and Promotional Services 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. Revenue from our participation in the theatrical release of feature films is recognized as earned based on our share of the ultimate expected revenue. 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 the Company’s 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 and six months ended June 30, 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 on the straight-line method over their useful lives ranging from three to twelve years. The Company recorded amortization expense of $1,357,467 and $426,651 for the three months ended June 30, 2018 and 2017, respectively, and $2,613,326 and $853,302 for the six months ended June 30, 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 because the carrying value is greater than the projected undiscounted cash flows, 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 the assets’ fair 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 and six months ended June 30, 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 Topic 718, Stock Compensation Equity |
Fair Value Measurements | Fair Value Measurements ASC Topic 820, Fair Value Measurement and Disclosures 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, including pricing models, discounted cash flow methodologies, or similar techniques. The carrying value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. The liabilities in connection with the conversion and make-whole features included within certain of the Company’s convertible notes payable and warrants are each classified as a level 3 liability. |
Derivative Instruments | Derivative Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates its convertible notes and warrants to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with Paragraph 815-10-05-4 of the FASB ASC and Paragraph 815-40-25 of the Codification. The result of this accounting treatment is that the fair value of the embedded derivative is marked-to-market each balance sheet date and recorded as a liability. In the event that the fair value is recorded as a liability, the change in fair value is recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Derivative instrument liabilities are classified in the balance sheet as current or non-current to correspond with its host instrument. The Company marks to market the fair value of the embedded derivatives at each balance sheet date and records the change in the fair value of the embedded derivatives as other income or expense in the statements of operations. The Company utilizes a Monte Carlo Method that values the liability of the debt conversion feature derivative financial instruments and derivative warrants based on a probability of a down round event. The reason the Company selected the lattice binomial model is that in many cases there may be multiple embedded features or the features of the bifurcated derivatives may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument. Therefore, the fair value may not be appropriately captured by simple models. |
Warrant Liability | Warrant Liability The Company evaluates its warrants to determine if those contracts qualify as liabilities in accordance with ASC 480-10 and ASC 815-40. The result of this accounting treatment is that the fair value of the warrant liability is marked-to-market each balance sheet date and recorded as a liability, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a warrant liability, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. For warrants with a fixed conversion price and a fixed number of shares, the Company utilizes a Black Scholes model for valuation. For warrants with variability in the number of shares or conversion price (such as a down round feature), the Company utilizes the Monte Carlo Method to value the warrant liability. The reason the Company selected the lattice binomial model is that in many cases there may be multiple embedded features or the features may be so complex that a Black-Scholes valuation does not consider all of the terms of the instrument. Therefore, the fair value may not be appropriately captured by simple models. Accounting for Film Costs We capitalize costs of acquiring participation rights to films. The costs for an individual film are amortized to direct operating expenses in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the current year expected to be recognized from the distribution, exhibition or sale of such film. Ultimate revenue includes estimates over a period not to exceed ten years following the date of initial release of the motion picture. For participation rights previously released films acquired as part of a library, ultimate revenue includes estimates over a period not to exceed twenty years from the date of acquisition. Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates may differ from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of our business, some films and titles are more successful or less successful than anticipated. Management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and/or write-down of all or a portion of the unamortized costs of the film to its estimated fair value. Management estimates the ultimate revenue based on experience with similar titles or title genre, the general public appeal of the cast, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change. An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less film amortization expense, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher film amortization expense, and could also periodically result in an impairment requiring a write-down of the film cost to the title’s fair value. These write-downs are included in amortization expense within cost of revenues in our consolidated statements of operations. Investment in films is stated at the lower of amortized cost or estimated fair value. Additional amortization is recorded in the amount by which the unamortized costs exceed the estimated fair value of the film. Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films may be required as a consequence of changes in our future revenue estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following accounting standards updates were recently issued and have not yet been adopted. These standards are currently under review to determine their impact on the consolidated balance sheets, consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases, Codification Improvements to Topic 842 (Leases) Leases (Topic 842), Targeted Improvements 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 (“ASU 2017-11”), Earnings Per Share Distinguishing Liabilities from Equity Derivatives and Hedging In June 2018, the FASB issued ASU 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Schedule of disaggregation of revenue | Three Months Ended Six Months Ended 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Consulting $ 829,606 $ 1,140,951 $ 1,669,109 $ 2,499,013 Subscription 72,403,640 - 119,566,087 - Marketing and promotional services 935,488 - 2,376,398 - Total revenues $ 74,168,734 $ 1,140,951 $ 123,611,594 $ 2,499,013 |
Acquisitions of MoviePass, Movi
Acquisitions of MoviePass, Moviefone and the Formation of MoviePass Films (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Moviefone [Member] | |
Business Acquisition [Line Items] | |
Schedule of fair values of assets acquired and liabilities assumed | Purchase consideration: Moviefone Cash $ 1,000,000 Common shares issued 7,599,458 Warrants for common shares issued 5,475,500 Fair value of consideration transferred $ 14,074,958 Trade names and trademarks $ 4,640,000 Technology 340,000 Customer relationships 560,000 Goodwill 8,534,958 Total purchase price allocation $ 14,074,958 |
MoviePass [Member] | |
Business Acquisition [Line Items] | |
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 A29
Net Income/(Loss) Per Share Attributable to Common Stockholders (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Net Income/(Loss) Per Share Attributable to Common Stockholders [Abstract] | |
Schedule of diluted net loss per share attributable to common stockholder's | June 30, December 31, 2018 2017 Warrants 66,821 38,526 Conversion features on convertible notes 336,425 5,482 Total potentially dilutive shares 403,246 44,008 |
Prepaid Expenses and Other Cu30
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Prepaid Expenses and Other Current Assets [Abstract] | |
Schedule of prepaid expenses and other current assets | June 30, December 31, 2017 Vendor deposits $ 8,083,907 $ 147,533 Tax - 108,433 Deposits - 230,711 Insurance 78,719 86,181 Professional fees and services 93,571 33,333 Deferred stock compensation 464,335 2,885,278 Rent - 52,650 Other 642,223 13,692 Total prepaid expenses and other current assets $ 9,362,755 $ 3,557,811 |
Intangible Assets, net and Go31
Intangible Assets, net and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Intangible Assets, net and Goodwill [Abstract] | |
Schedule of intangibles assets | June 30, 2018 Useful Life (Years) Gross Acquisitions Accumulated Amortization Impairments Net Book Value Customer relationships 7 $ 2,560,000 $ 560,000 $ (222,613 ) $ - $ 2,897,387 Technology 3 8,070,000 340,000 (3,071,620 ) - 5,338,380 Tradenames and trademarks 10-20 19,873,224 4,640,000 (1,466,836 ) - 23,046,388 Broker relationships 5 - - - - - Patents 12 196,353 - (16,262 ) - 180,091 $ 30,699,577 $ 5,540,000 $ (4,777,331 ) $ - $ 31,462,246 December 31, 2017 Estimated Gross 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 10 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 estimated future annual amortization expense | June 30, Remaining 2018 $ 2,726,155 2019 5,246,717 2020 3,957,471 2021 2,678,569 2022 2,648,976 Thereafter 14,204,358 $ 31,462,246 |
Schedule of goodwill carrying value | Balance as of December 31, 2017 $ 79,137,177 Acquisitions 8,534,958 Impairments - Balance as of June 30, 2018 $ 87,672,135 |
Accounts Payable and Accrued 32
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounts Payable and Accrued Expenses [Abstract] | |
Schedule of accounts payable and accrued expenses | June 30, 2018 December 31, 2017 Accounts payable $ 5,619,294 $ 5,087,060 Accrued ticket expense 7,177,764 4,743,582 Accrued professional fees 1,084,624 597,187 Accrued credit card fees - 782,670 Accrued payroll expense 1,341,900 312,149 Accrued other expense 4,773,922 852,840 Accrued interest 1,265,087 768,515 Total $ 21,262,591 $ 13,144,003 |
Senior Secured Convertible No33
Senior Secured Convertible Notes and Warrants and Unit Offerings (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Senior Secured Convertible Notes and Warrants and Unit Offerings [Abstract] | |
Schedule of senior secured convertible notes | June 30, December 31, August 2017 Notes $ - $ 2,061,072 November 2017 Notes 129,675 1,550,555 January 2018 Notes 47,420 - June 2018 Notes 134,610 - Balance at period end $ 311,705 $ 3,611,627 |
Schedule of carrying value of the senior secured convertible notes | June 30, December 31, 2017 August 2017 Notes $ - $ 4,505,440 November 2017 Notes 875,000 2,943,069 January Make-whole 352,187 - June 2018 Notes 24,600,000 - Unamortized discounts (25,515,482 ) (3,836,882 ) Balance at period end $ 311,705 $ 3,611,627 |
Schedule of the Company's warrant activity | Warrant Shares Weighted Average Exercise Price Weighted Outstanding/exercisable – December 31, 2017 38,526 $ 6.04 4.86 Granted 183,472 3.81 4.69 Exercised (151,877 ) 5.48 4.65 Forfeited/cancelled - - - Outstanding/exercisable – June 30, 2018 66,821 $ 4.72 4.69 |
Fair Value of Financial Asset34
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis [Abstract] | |
Schedule 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 June 30, 2018 Liabilities Derivative liability – warrants $ 4,266,100 $ - $ - $ 4,266,100 Derivative liability – conversion feature 41,537,054 - - 41,537,054 Total $ 45,803,154 $ - $ - $ 45,803,154 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 Issuances to Debt Discount 65,341,847 Issuances to Interest Expense 25,503,629 Reclass from APIC to derivative- Feb Offering 158,944,798 Reclass from APIC to Derivative- April Offering 33,997,600 Warrants issued in acquisiton of moviefone 5,475,500 Gain on Exchange of Warrants (301,487 ) Settlement of Warrant Liability for March Warrant Exchange (12,894,165 ) Settlement of Warrant Liability for June Warrant Exchange (5,202,100 ) Gain on march exchange (cash paid) (781,195 ) Conversion to paid in capital (78,311,704 ) Gain/Loss on Extinguishment (15,007,699 ) Change in FMV Warrant (189,840,088 ) Change in FMV Derivatve (13,245,044 ) Balance at June 30, 2018 $ 45,803,154 |
Schedule of fair value of the derivative conversion features and warrant liabilities | June 30, 2018 December 31, 2017 Amount Amount Dividend yield 0% 0% Expected volatility 145% - 160% 45% - 270% Risk free interest rate 2.18% - 2.72% 1.06% - 2.20% Contractual term (in years) 1.36 - 5.00 0.19 - 5.00 Exercise price $0.25 - $3,015 $0.25 - $3,577.50 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 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 28,219,464 $ 0.14 9.13 $ 8,313,684 Granted 39,809,175 $ 0.43 Exercised - - - - Forfeited, cancelled, expired - - - - Outstanding as of June 30, 2018 68,028,639 $ 0.31 9.18 $ 1,531,009 Vested and exercisable at June 30, 2018 22,318,253 $ 0.18 8.74 $ 1,032,565 |
Schedule of weighted-average assumptions used to compute the fair value of options granted | Six Months Ended June 30, 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) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies [Abstract] | |
Schedule of operating lease commitments | Payments due by period Less than 1 year $ 148,049 1 to 3 years 780,798 3 to 5 years 115,753 Thereafter - Total $ 1,044,600 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Three Months Ended Six Months Ended 2018 2017 2018 2017 Consulting Revenue $ 829,606 $ 1,140,951 $ 1,669,109 $ 2,499,013 Cost of revenue 681,577 917,564 1,392,771 2,023,049 Gross profit 148,029 223,387 276,338 475,964 Total operating expenses 5,743,072 1,349,482 14,160,984 4,663,029 Loss from operations (5,595,043 ) (1,126,095 ) (13,884,646 ) (4,187,065 ) Total other income/(expense) 42,975,245 (2,449,557 ) 124,685,936 (4,541,120 ) Provision for income taxes (5,219 ) 72,341 (1,043 ) 41,857 Total net income (loss) $ 37,374,983 $ (3,503,311 ) $ 110,800,247 $ (8,686,328 ) Technology Revenue $ - $ - $ - $ - Cost of revenue - - - - Gross profit - - - - Total operating expenses 937,343 1,617,804 2,070,791 2,915,354 Loss from operations (937,343 ) (1,617,804 ) (2,070,791 ) (2,915,354 ) Total other income/(expense) 17,031 (16,987 ) 59 (33,975 ) Provision for income taxes - - - - Total net loss $ (920,312 ) $ (1,634,791 ) $ (2,070,732 ) $ (2,949,329 ) Subscription and Marketing and Promotional Services Revenue $ 73,339,128 $ - $ 121,942,485 $ - Cost of revenue 178,085,142 - 313,342,924 - Gross profit (104,746,014 ) - (191,400,439 ) - Total operating expenses 15,360,459 - 27,014,976 - Loss from operations (120,106,473 ) - (218,415,415 ) - Total other income/(expense) - - - - Provision for income taxes (23,500 ) - (35,627 ) - Total net loss $ (120,129,973 ) $ - $ (218,451,042 ) $ - As of June 30, 2018 As of December 31, 2017 Consulting Cash and cash equivalents $ 10,998,366 $ 569,886 Accounts receivable $ 311,381 $ 332,753 Prepaid expenses and other current assets $ 835,212 $ 3,382,127 Property and equipment $ 152,415 $ 96,464 Intangible assets $ 4,897,504 $ - Goodwill $ - $ - Deposits and other assets $ 128,625 $ 129,119 Accounts payable and accrued expenses $ 3,600,737 $ 2,088,867 Liabilities to be settled in stock $ 5,669,263 $ 20,875,045 Convertible notes payable $ 311,705 $ 3,611,627 Warrant liability $ 4,266,100 $ 67,288,800 Derivative liability $ 41,537,054 $ 4,834,462 Technology Cash and cash equivalents $ 2,577,138 $ 21,933,765 Prepaid expenses and other current assets $ 8,333 $ 21,666 Property and equipment $ 86,562 $ 95,301 Intangible assets, net $ 2,108,287 $ 2,829,295 Goodwill $ - $ - Deposits and other assets $ 10,053 $ 10,052 Accounts payable and accrued expenses $ 112,418 $ 607,622 Liabilities to be settled in stock $ 319,100 $ 445,660 Subscription and Marketing and Promotional Services Cash and cash equivalents $ 1,937,306 $ 2,445,742 Accounts receivable $ 28,340,358 $ 27,137,466 Prepaid expenses and other current assets $ 8,519,210 $ 154,018 Property and equipment $ 130,553 $ 42,270 Intangible assets, net $ 29,353,959 $ 25,707,487 Goodwill $ 87,672,136 $ 79,137,177 Deposits and other assets $ 70,814 $ 8,000 Contract costs $ 2,052,882 $ - Accounts payable and accrued expenses $ 17,549,436 $ 10,447,514 Deferred revenue $ 65,371,837 $ 54,425,630 |
Business and Basis of Present38
Business and Basis of Presentation (Details) | 1 Months Ended | 6 Months Ended | ||
Jul. 24, 2018 | Apr. 30, 2018 | Jun. 30, 2018 | May 23, 2018 | |
Business And Basis Of Presentation [Line Items] | ||||
Description of consolidation of entities | The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. | |||
Description of entertainment service | Moviefone is an entertainment service which provides over 6 million monthly unique visitors full access to the entertainment ecosystem. | |||
MoviePass [Member] | ||||
Business And Basis Of Presentation [Line Items] | ||||
Ownership percentage | 91.80% | 49.00% | ||
Subsequent Event [Member] | ||||
Business And Basis Of Presentation [Line Items] | ||||
Reverse stock split, description | The Company effected a reverse stock-split of its issued and outstanding common stock at a ratio of one-for-250 ("Reverse Stock Split"). The Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware effecting the Reverse Stock Split. The Reverse Stock Split did not affect the number of authorized shares of common stock, which, following the increase in authorized shares effected on July 23, 2018 discussed in Note 11, remains at 5,000,000,000 shares. |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Consulting | $ 829,606 | $ 1,140,951 | $ 1,669,109 | $ 2,499,013 |
Subscription | 72,403,640 | 119,566,087 | ||
Marketing and promotional services | 935,488 | 2,376,398 | ||
Total revenues | $ 74,168,734 | $ 1,140,951 | $ 123,611,594 | $ 2,499,013 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Summary of Significant Accounting Policies (Textual) | ||||
Amortization expense | $ 1,357,467 | $ 426,651 | $ 2,613,574 | $ 853,302 |
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 |
Going Concern Analysis (Details
Going Concern Analysis (Details) - USD ($) shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||
May 31, 2018 | Apr. 30, 2018 | Apr. 18, 2018 | Feb. 28, 2018 | Jan. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 26, 2018 | Jan. 11, 2018 | Dec. 31, 2017 | Feb. 08, 2017 | Dec. 31, 2016 | |
Going Concern Analysis (Textual) | ||||||||||||||
Accumulated deficit | $ (247,654,083) | $ (247,654,083) | $ (189,495,185) | |||||||||||
Net cash used in operating activities | (219,209,083) | $ (4,939,042) | ||||||||||||
Cash | 15,512,810 | $ 1,433,980 | 15,512,810 | 1,433,980 | 24,949,393 | $ 2,747,240 | ||||||||
Working capital deficit | 84,898,641 | 84,898,641 | 107,097,249 | |||||||||||
Warrant and derivative liabilities | 45,803,154 | 45,803,154 | $ 72,123,262 | |||||||||||
Secured financing | 25,000,000 | 25,000,000 | $ 60,000,000 | |||||||||||
Ownership interests, description | The Company filed a shelf registration statement on form S-3 that was declared effective by the SEC on February 9, 2018, which allows the Company to offer and sell up to $400,000,000 of its equity or equity-linked securities. 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 | 27,500,000 | ||||||||||||
Loss from operations | (126,638,859) | $ (2,743,899) | (234,370,852) | $ (7,102,419) | ||||||||||
Gross proceeds related to convertible debt received | $ 25,077,889 | 25,077,889 | ||||||||||||
Principal amount | 228,672,111 | $ 228,672,111 | $ 5,000,000 | |||||||||||
Offering sale of transaction, shares | 0.4 | |||||||||||||
Offering received net proceeds | $ 52,700,000 | |||||||||||||
Stockholders pre-split | (100.8 million pre-split) | |||||||||||||
Public offering [Member] | ||||||||||||||
Going Concern Analysis (Textual) | ||||||||||||||
Total net proceeds from the public offering | ||||||||||||||
Gross proceeds for common stock and warrants | $ 27,500,000 | |||||||||||||
Canaccord Genuity LLC [Member] | ||||||||||||||
Going Concern Analysis (Textual) | ||||||||||||||
Common stock sale of offering price | $ 150,000,000 | |||||||||||||
Convertible Debt [Member] | ||||||||||||||
Going Concern Analysis (Textual) | ||||||||||||||
Secured financing | 20,500,000 | 20,500,000 | $ 139,400,000 | |||||||||||
Senior Convertible Notes [Member] | November 7, 2017 [Member] | ||||||||||||||
Going Concern Analysis (Textual) | ||||||||||||||
Principal amount | 0 | 0 | ||||||||||||
Senior Convertible Notes [Member] | January 23, 2018 [Member] | ||||||||||||||
Going Concern Analysis (Textual) | ||||||||||||||
Principal amount | $ 352,188 | $ 352,188 |
Acquisitions of MoviePass, Mo42
Acquisitions of MoviePass, Moviefone and the Formation of MoviePass Films (Details) | Jun. 30, 2018USD ($) |
MoviePass [Member] | |
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 |
Moviefone [Member] | |
Purchase consideration: | |
Cash | 1,000,000 |
Common shares issued | 7,599,458 |
Warrants for common shares issued | 5,475,500 |
Fair value of consideration transferred | 14,074,958 |
Identifiable intangible assets: | |
Tradenames and trademarks | 4,640,000 |
Technology | 340,000 |
Customer relationships | 560,000 |
Goodwill | 8,534,958 |
Total purchase price allocation | $ 14,074,958 |
Acquisitions of MoviePass, Mo43
Acquisitions of MoviePass, Moviefone and the Formation of MoviePass Films (Details Textual) - USD ($) | Mar. 08, 2018 | Dec. 11, 2017 | May 23, 2018 | Apr. 04, 2018 | Apr. 12, 2018 | Jun. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Feb. 08, 2017 |
Acquisitions and Joint Ventures (Textual) | |||||||||
Percentage of interest in loint venture | 51.00% | ||||||||
Principal amount | $ 228,672,111 | $ 228,672,111 | $ 5,000,000 | ||||||
Contribution distribution agreements | EFO has assigned its rights in a film output agreement of EFO to MoviePass Films. MoviePass Films has begun operations, and the Company and EFO are finalizing the long form agreements that will further define the relative rights and duties of the Company and EFO with respect to MoviePass Films. In accordance with the LOI as of June 30, 2018, the Company is committed to contribute to MoviePass Films an additional $3,000,000 in cash and 16,000 (4,000,000 pre-split) shares for the acquisition of ownership and economic interests in films. | ||||||||
Maximum [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Estimated useful life (Years) | 12 years | ||||||||
Percentage of purchased shares | 100.00% | 100.00% | |||||||
Discount rates | 22.10% | 22.10% | |||||||
Percentage of royalty rates | 100.00% | 100.00% | |||||||
Minimum [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Estimated useful life (Years) | 3 years | ||||||||
Percentage of purchased shares | 0.00% | 0.00% | |||||||
Discount rates | 9.00% | 9.00% | |||||||
Percentage of royalty rates | 0.00% | 0.00% | |||||||
Tradenames and trademarks [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Estimated useful life (Years) | 7 years | 20 years | |||||||
Percentage of purchased shares | 10.00% | 10.00% | |||||||
Percentage of royalty rates | 10.00% | 10.00% | |||||||
Customer relationships [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Estimated useful life (Years) | 7 years | 7 years | |||||||
Technology [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Estimated useful life (Years) | 3 years | 3 years | |||||||
MoviePass Transaction [Member] | |||||||||
Acquisitions and Joint Ventures (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 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. | ||||||||
Principal amount | $ 1,000,000 | ||||||||
Percentage of additional shares outstanding | 62.41% | ||||||||
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% | ||||||||
Percentage of royalty rates | 81.20% | ||||||||
Helios Convertible Note [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Additional payment amount value | $ 29,000,000 | ||||||||
Unregistered common stock shares | 16,000 | ||||||||
Conversion Shares subject to forfeiture | 2,667 | ||||||||
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. | ||||||||
Helios Convertible Note [Member] | Pre-split [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Unregistered common stock shares | 4,000,000 | ||||||||
Conversion Shares subject to forfeiture | 666,667 | ||||||||
MoviePass [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Percentage of purchased shares | 91.80% | ||||||||
Cash advances to MoviePass | $ 35,000,000 | $ 112,731,000 | |||||||
Percentage of common stock total outstanding shares | 10.60% | ||||||||
Pre-money valuation amount | $ 295,525,000 | ||||||||
Percentage of royalty rates | 91.80% | ||||||||
Acquisition of Moviefone Brand [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Description of acquisition purchase price | (i) $1.0 million in cash, (ii) the issuance of 10,201 (2,550,154 pre-split) shares of common stock of the Company with a market value of $7.6 million as of the closing date, and (iii) the issuance of warrants to purchase 10,201 (2,550,154 pre-split) shares of common stock of the Company at an exercise price of $1,375 ($5.50 pre-split) per share. In addition, and pursuant to the Moviefone Purchase Agreement, the Company assumed certain specified liabilities incurred after the acquisition date and retained certain employees of Moviefone. | ||||||||
Letter of Intent [Member] | |||||||||
Acquisitions and Joint Ventures (Textual) | |||||||||
Advances from affiliates | $ 2,000,000 | ||||||||
Retained interest percentage | 51.00% |
Net Income_(Loss) Per Share A44
Net Income/(Loss) Per Share Attributable to Common Stockholders (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Net Income/(Loss) Per Share Attributable to Common Stockholders | ||
Total potentially dilutive shares | 403,246 | 44,008 |
Warrants [Member] | ||
Net Income/(Loss) Per Share Attributable to Common Stockholders | ||
Total potentially dilutive shares | 66,821 | 38,526 |
Conversion features on convertible notes [Member] | ||
Net Income/(Loss) Per Share Attributable to Common Stockholders | ||
Total potentially dilutive shares | 336,425 | 5,482 |
Prepaid Expenses and Other Cu45
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Prepaid Expenses and Other Current Assets [Abstract] | ||
Vendor deposits | $ 8,083,907 | $ 147,533 |
Tax | 108,433 | |
Deposits | 230,711 | |
Insurance | 78,719 | 86,181 |
Professional fees and services | 93,571 | 33,333 |
Deferred stock compensation | 464,335 | 2,885,278 |
Rent | 52,650 | |
Other | 642,223 | 13,692 |
Total prepaid expenses and other current assets | $ 9,362,755 | $ 3,557,811 |
Intangible Assets, net and Go46
Intangible Assets, net and Goodwill (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 30,699,577 | $ 6,447,553 |
Acquisitions | 5,540,000 | 25,910,000 |
Accumulated Amortization | (4,777,331) | (2,163,757) |
Impairments | (1,657,014) | |
Net Book Value | $ 31,462,246 | $ 28,536,782 |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 3 years | |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 12 years | |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 7 years | 7 years |
Gross Carrying Amount | $ 2,560,000 | |
Acquisitions | 560,000 | 2,560,000 |
Accumulated Amortization | (222,613) | (20,645) |
Impairments | ||
Net Book Value | $ 2,897,387 | $ 2,539,355 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 3 years | 3 years |
Gross Carrying Amount | $ 8,070,000 | $ 4,270,000 |
Acquisitions | 340,000 | 3,800,000 |
Accumulated Amortization | (3,071,620) | (1,700,431) |
Impairments | ||
Net Book Value | $ 5,338,380 | $ 6,369,569 |
Tradenames and trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 10 years | 7 years |
Gross Carrying Amount | $ 19,873,224 | $ 1,977,000 |
Acquisitions | 4,640,000 | 19,550,000 |
Accumulated Amortization | (1,466,836) | (433,588) |
Impairments | (1,653,776) | |
Net Book Value | $ 23,046,388 | $ 19,439,636 |
Tradenames and trademarks [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 10 years | |
Tradenames and trademarks [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 20 years | |
Broker relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 5 years | 5 years |
Gross Carrying Amount | $ 4,200 | |
Acquisitions | ||
Accumulated Amortization | (962) | |
Impairments | (3,238) | |
Net Book Value | ||
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life (Years) | 12 years | 12 years |
Gross Carrying Amount | $ 196,353 | $ 196,353 |
Acquisitions | ||
Accumulated Amortization | (16,262) | (8,131) |
Impairments | ||
Net Book Value | $ 180,091 | $ 188,222 |
Intangible Assets, net and Go47
Intangible Assets, net and Goodwill (Details 1) | Jun. 30, 2018USD ($) |
Intangible Assets, net and Goodwill [Abstract] | |
Remaining 2,018 | $ 2,726,155 |
2,019 | 5,246,717 |
2,020 | 3,957,471 |
2,021 | 2,678,569 |
2,022 | 2,648,976 |
Thereafter | 14,204,358 |
Total | $ 31,462,246 |
Intangible Assets, net and Go48
Intangible Assets, net and Goodwill (Details 2) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Intangible Assets, net and Goodwill [Abstract] | |
Balance as of December 31, 2017 | $ 79,137,177 |
Acquisitions | 8,534,958 |
Impairments | |
Balance as of June 30, 2018 | $ 87,672,135 |
Intangible Assets, net and Go49
Intangible Assets, net and Goodwill (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Intangible Assets, net and Goodwill (Textual) | ||||
Amortization expense | $ 1,357,467 | $ 426,651 | $ 2,613,574 | $ 853,302 |
Accounts Payable and Accrued 50
Accounts Payable and Accrued Expenses (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Expenses [Abstract] | ||
Accounts payable | $ 5,619,294 | $ 5,087,060 |
Accrued ticket expense | 7,177,764 | 4,743,582 |
Accrued professional fees | 1,084,624 | 597,187 |
Accrued credit card fees | 782,670 | |
Accrued payroll expense | 1,341,900 | 312,149 |
Accrued other expense | 4,773,922 | 852,840 |
Accrued interest | 1,265,087 | 768,515 |
Total | $ 21,262,591 | $ 13,144,003 |
Senior Secured Convertible No51
Senior Secured Convertible Notes and Warrants and Unit Offerings (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Senior secured convertible notes | $ 311,705 | $ 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 | 129,675 | 1,550,555 |
January 2018 Notes [Member] | ||
Short-term Debt [Line Items] | ||
Senior secured convertible notes | 47,420 | |
June 2018 Notes [Member] | ||
Short-term Debt [Line Items] | ||
Senior secured convertible notes | $ 134,610 |
Senior Secured Convertible No52
Senior Secured Convertible Notes and Warrants and Unit Offerings (Details 1) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Unamortized discounts | $ (25,515,482) | $ (3,836,882) |
Carrying value of senior secured convertible notes | 311,705 | 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 | 875,000 | 2,943,069 |
January Make-whole [Member] | ||
Short-term Debt [Line Items] | ||
Carrying value of senior secured convertible notes | 352,187 | |
June 2018 Notes [Member] | ||
Short-term Debt [Line Items] | ||
Carrying value of senior secured convertible notes | $ 24,600,000 |
Senior Secured Convertible No53
Senior Secured Convertible Notes and Warrants and Unit Offerings (Details 2) - Warrant Activity [Member] | 6 Months Ended |
Jun. 30, 2018USD ($)shares | |
Warrant Liability Activity | |
Outstanding/exercisable, Warrant Shares | shares | 38,526 |
Granted, Warrant Shares | shares | 183,472 |
Exercised, Warrant Shares | shares | (151,877) |
Forfeited/cancelled, Warrant Shares | shares | |
Outstanding/exercisable, Warrant Shares | shares | 66,821 |
Outstanding/exercisable, Weighted Average Exercise Price | $ | $ 6.04 |
Granted, Weighted Average Exercise Price | $ | 3.81 |
Exercised, Weighted Average Exercise Price | $ | 5.48 |
Forfeited/cancelled, Weighted Average Exercise Price | $ | |
Outstanding/exercisable, Weighted Average Exercise Price | $ | $ 4.72 |
Outstanding/exercisable, Weighted Average Remaining Contractual Life Years | 4 years 10 months 10 days |
Granted, Weighted Average Remaining Contractual Life Years | 4 years 8 months 9 days |
Exercised, Weighted Average Remaining Contractual Life Years | 4 years 7 months 24 days |
Forfeited/cancelled, Weighted Average Remaining Contractual Life Years | 0 years |
Outstanding/exercisable, Weighted Average Remaining Contractual Life Years | 4 years 8 months 9 days |
Senior Secured Convertible No54
Senior Secured Convertible Notes and Warrants and Unit Offerings (Details Textual) | Jun. 01, 2018 | Apr. 03, 2018USD ($) | Feb. 13, 2018USD ($)$ / shares | Nov. 07, 2017USD ($) | Oct. 23, 2017USD ($)shares | Feb. 08, 2017USD ($)ConvertibleNote | Jul. 24, 2018 | Jun. 28, 2018USD ($) | Jun. 26, 2018 | Apr. 23, 2018 | Mar. 31, 2018USD ($)shares | Feb. 20, 2018USD ($)shares | Jan. 23, 2018USD ($) | Jan. 03, 2018USD ($) | Nov. 21, 2017$ / sharesshares | Aug. 27, 2017USD ($) | Aug. 16, 2017USD ($)ConvertibleNote$ / sharesshares | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)$ / sharesshares | Aug. 13, 2018$ / shares | Jul. 23, 2018$ / shares | Apr. 04, 2018$ / shares | Apr. 02, 2018USD ($) | Jan. 26, 2018USD ($) | Sep. 30, 2017USD ($) |
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 5,000,000 | $ 228,672,111 | $ 228,672,111 | |||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 5.50 | |||||||||||||||||||||||||||
Investor converted total | $ 2,500,000 | |||||||||||||||||||||||||||
New note shares of common stock | shares | 2,211 | |||||||||||||||||||||||||||
Gain on exchange of warrants | 301,487 | |||||||||||||||||||||||||||
Unfunded portion investor note remaining | $ 228,672,111 | |||||||||||||||||||||||||||
Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
New note shares of common stock | shares | 552,782 | |||||||||||||||||||||||||||
Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Placement agent notes and warrants, description | The June Placement Agent Warrant allows the purchase of up to 8% of the number of shares of the Company’s common stock determined by dividing the aggregate purchase price of the Preferred Stock purchased by the Conversion Price in effect as of the Subscription Date [(as defined in the June Placement Agent Warrant)] and eight percent (8%) of the number of shares of common stock into which any Unrestricted Principal of the June 2018 Convertible Notes purchased is initially convertible at the Conversion Price in effect as of the Subscription Date, at an exercise price equal to the Conversion Price of the June 2018 Convertible Notes in effect as of the Subscription Date, without regard to any adjustment of the Conversion Price resulting from the anti-dilution provision of the June 2018 Convertible Notes, other than proportionate adjustments to the Conversion Price resulting from stock splits or combinations or similar proportionately applied changes to the Company’s outstanding common stock. During the period ended June 30, 2018, the Company issued 3,200 (800,000 pre-split) warrants at an exercise prices of $250 ($1 pre-split) per share. | |||||||||||||||||||||||||||
Warrant [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock nominal exercise price | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||||||||||||||||
Subsequent Event [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Reverse stock split, description | The Company effected a reverse stock-split of its issued and outstanding common stock at a ratio of one-for-250 ("Reverse Stock Split"). The Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware effecting the Reverse Stock Split. The Reverse Stock Split did not affect the number of authorized shares of common stock, which, following the increase in authorized shares effected on July 23, 2018 discussed in Note 11, remains at 5,000,000,000 shares. | |||||||||||||||||||||||||||
September Notes [Member] | Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (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. | |||||||||||||||||||||||||||
February 2017 Notes [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Number of instruments issued | ConvertibleNote | 2 | |||||||||||||||||||||||||||
Principal amount | $ 5,681,818 | |||||||||||||||||||||||||||
Interest percentage | 6.00% | |||||||||||||||||||||||||||
Interest expenses | $ 81,023 | $ 131,213 | ||||||||||||||||||||||||||
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 $1,125 ($4.50 pre-split), 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) $1,125 ($4.50 pre-split) and (ii) the greater of (I) $1,000 ($4.00 pre-split) 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) $750 ($3.00 pre-split) 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 | 7,411 | |||||||||||||||||||||||||||
Floor price variances | The Floor Price was defined as $750 ($3.00 pre-split) through October 4, 2017 and $125 ($0.50 pre-split) following October 4, 2017. | |||||||||||||||||||||||||||
Principal amount | $ 681,818 | |||||||||||||||||||||||||||
Interest amount of common stock | $ 49,000 | |||||||||||||||||||||||||||
February 2017 Notes [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock issued upon convertible notes | shares | 1,852,886 | |||||||||||||||||||||||||||
February 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Interest percentage | 8.00% | 8.00% | ||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 533 | 533 | ||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 750 | |||||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||||
Warrants issued | shares | 272 | 272 | ||||||||||||||||||||||||||
February 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 133,334 | 133,334 | ||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 3 | |||||||||||||||||||||||||||
Warrants issued | shares | 67,987 | 67,987 | ||||||||||||||||||||||||||
August 2017 Notes [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Number of instruments issued | ConvertibleNote | 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 $1,000 ($4.00 pre-split) for the Initial Series A Note and the Additional Series A Note and $750 ($3.00 pre-split) for the Series B Note. | |||||||||||||||||||||||||||
August 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Consideration received in cash for convertible note | $ 8,800,000 | |||||||||||||||||||||||||||
Principal amount | $ 9,050,000 | $ 9,050,000 | ||||||||||||||||||||||||||
Interest percentage | 8.00% | 8.00% | ||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 704 | |||||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||||
August 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 176,000 | |||||||||||||||||||||||||||
August 2017 Notes [Member] | Minimum [Member] | Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrant exercisable pre-split value | $ 750 | |||||||||||||||||||||||||||
August 2017 Notes [Member] | Minimum [Member] | Placement Agent Notes and Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 3 | |||||||||||||||||||||||||||
August 2017 Notes [Member] | Maximum [Member] | Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrant exercisable pre-split value | $ 3,568 | |||||||||||||||||||||||||||
August 2017 Notes [Member] | Maximum [Member] | Placement Agent Notes and Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 14.27 | |||||||||||||||||||||||||||
Investor Note [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 60,000,000 | $ 2,894,062 | ||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 17,414 | |||||||||||||||||||||||||||
Cash payment | $ 779,219 | 25,000,000 | ||||||||||||||||||||||||||
Investor Note [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 4,353,581 | |||||||||||||||||||||||||||
February 2017 Investor Note [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Description of notes conversion agreement | To effect an exchange (the "Share Exchange") of 3,365 (841,250 pre-split) 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 3,365 (841,250 pre-spilt). | |||||||||||||||||||||||||||
Investor Warrant [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Consideration received in cash for convertible note | $ 220,000 | |||||||||||||||||||||||||||
Principal amount | $ 697,000 | |||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 40 | 7,572 | 6,860 | |||||||||||||||||||||||||
Interest expenses | $ 12,878,864 | |||||||||||||||||||||||||||
Warrants value | $ 977,142 | |||||||||||||||||||||||||||
Investor additional shares of common stock | shares | 1,303 | |||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 3,578 | $ 812.50 | $ 812.50 | |||||||||||||||||||||||||
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 Warrant, which was determined to be a liability, was recorded at fair value and accounted for as an original issuance discount to the August 2017 Notes. | |||||||||||||||||||||||||||
Conversion price | $ / shares | $ 750 | 750 | ||||||||||||||||||||||||||
Investor Warrant [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 10,000 | 1,892,972 | 1,715,006 | |||||||||||||||||||||||||
Investor additional shares of common stock | shares | 325,714 | |||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 14.31 | $ 3.25 | 3.25 | |||||||||||||||||||||||||
Conversion price | $ / shares | $ 3 | $ 3 | ||||||||||||||||||||||||||
Investor Warrant [Member] | Minimum [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 7,572 | 7,572 | ||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 750 | |||||||||||||||||||||||||||
Investor Warrant [Member] | Minimum [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 1,892,972 | 1,892,972 | ||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 3 | |||||||||||||||||||||||||||
Investor Warrant [Member] | Maximum [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 8,203 | 8,203 | ||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 812.50 | |||||||||||||||||||||||||||
Investor Warrant [Member] | Maximum [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | 2,050,720 | 2,050,720 | ||||||||||||||||||||||||||
Warrants exercise price | $ / shares | $ 3.25 | |||||||||||||||||||||||||||
November 2017 Notes [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 875,000 | $ 875,000 | ||||||||||||||||||||||||||
Cash payment | 25,077,889 | |||||||||||||||||||||||||||
Interest expenses | $ 4,677,484 | $ 5,733,114 | ||||||||||||||||||||||||||
Notes, maturity date | Nov. 7, 2019 | |||||||||||||||||||||||||||
Common stock issued upon convertible notes | shares | 411,448 | 251,546 | ||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 3,015 | $ 3,015 | $ 3,015 | |||||||||||||||||||||||||
Description of convertible debt | The Company entered into an amendment to the securities purchase agreement between the Company and the institutional investors holding the November 2017 Notes to reduce the number of shares of common stock required to be reserved for issuance under the November 2017 Notes from 200% to 110% of the maximum number of shares of common stock issuable upon conversion of the November 2017 Notes until the earlier of the January 2018 Notes Stockholder Approval Date (as defined below) and August 1, 2018. After such date, the required reserve amount will be increased back to 200%. | The November 2017 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. | ||||||||||||||||||||||||||
Convertible debt contract description | 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 | $ 0 | |||||||||||||||||||||||||||
Net proceeds from the sale of units | $ 5,000,000 | |||||||||||||||||||||||||||
Additional interest amount | $ 1,028,730 | $ 646,263 | ||||||||||||||||||||||||||
Conversion price | $ / shares | $ 0.345 | $ 0.345 | ||||||||||||||||||||||||||
November 2017 Notes [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock issued upon convertible notes | shares | 61,717,150 | 62,886,625 | ||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 12.06 | |||||||||||||||||||||||||||
November 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Consideration received in cash for convertible note | ||||||||||||||||||||||||||||
Principal amount | $ 100,000,000 | $ 100,000,000 | ||||||||||||||||||||||||||
Interest percentage | 8.00% | 8.00% | ||||||||||||||||||||||||||
Warrants issued to purchase common stock | shares | ||||||||||||||||||||||||||||
Cash payment | $ 25,077,889 | |||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 301.50 | $ 301.50 | ||||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||||
November 2017 Notes [Member] | Placement Agent Notes and Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 12.06 | $ 12.06 | ||||||||||||||||||||||||||
November 2017 Notes [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Conversion price | $ / shares | $ 0.345 | |||||||||||||||||||||||||||
November 2017 Notes [Member] | Minimum [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Accrued amount | $ 698,662 | |||||||||||||||||||||||||||
November 2017 Notes [Member] | Maximum [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | 24,202,889 | |||||||||||||||||||||||||||
Accrued amount | $ 3,704,867 | |||||||||||||||||||||||||||
Exchange Note [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
New note shares of common stock | shares | 3,789 | |||||||||||||||||||||||||||
Trading price | $ 19,950,000 | |||||||||||||||||||||||||||
Exchange Note [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
New note shares of common stock | shares | 947,218 | |||||||||||||||||||||||||||
Series A-1 Note [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | 25,000,000 | |||||||||||||||||||||||||||
Notes, maturity date | Jan. 23, 2020 | |||||||||||||||||||||||||||
Bear interest rate | 10.00% | 10.00% | ||||||||||||||||||||||||||
Series A-1 Note [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 6.50 | |||||||||||||||||||||||||||
Warrant exercisable pre-split value | $ 1,625 | |||||||||||||||||||||||||||
Series B-1 Note [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | 35,000,000 | |||||||||||||||||||||||||||
Series B-1 Note [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 5.50 | |||||||||||||||||||||||||||
Warrant exercisable pre-split value | $ 1,375 | |||||||||||||||||||||||||||
January 2018 Investor Note [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 35,000,000 | |||||||||||||||||||||||||||
January 2018 Notes [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Interest expenses | $ 457,776 | $ 809,963 | ||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 2,860 | $ 2,860 | ||||||||||||||||||||||||||
Converted shares | shares | 2,860 | |||||||||||||||||||||||||||
Description of convertible debt | The Company and the buyer entered into an amendment to the January Securities Purchase Agreement and the January 2018 Notes to reduce the number of shares of common stock required to be reserved for issuance under the January 2018 Notes from 200% to 100% of the maximum number of shares of common stock issuable upon conversion of the January 2018 Notes until the earlier of (1) the date stockholders approve resolutions providing for the issuance of the January 2018 Notes and the shares of common stock issuable upon conversion of the January 2018 Notes (the "January 2018 Notes Stockholder Approval" and the date the Stockholder Approval is obtained, the "January 2018 Notes Stockholder Approval Date") and (2) August 1, 2018. After such date, the required reserve amount will be increased back to 200%. | |||||||||||||||||||||||||||
Outstanding balance | $ 0 | |||||||||||||||||||||||||||
Accrued amount | 457,775 | |||||||||||||||||||||||||||
Capitalized balance | $ 352,187 | $ 352,187 | $ 352,187 | |||||||||||||||||||||||||
Conversion price | $ / shares | $ 1.83 | $ 1.83 | ||||||||||||||||||||||||||
January 2018 Notes [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 11.44 | $ 11.44 | ||||||||||||||||||||||||||
January 2018 Notes [Member] | Placement Agent Notes and Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 0 | $ 0 | ||||||||||||||||||||||||||
Interest percentage | 8.00% | 8.00% | ||||||||||||||||||||||||||
Cash payment | $ 35,000,000 | |||||||||||||||||||||||||||
Warrant term | 5 years | |||||||||||||||||||||||||||
Warrants issued | shares | 699 | 699 | ||||||||||||||||||||||||||
January 2018 Notes [Member] | Placement Agent Notes and Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 11.44 | $ 11.44 | ||||||||||||||||||||||||||
Warrant exercisable pre-split value | $ 2,860 | $ 2,860 | ||||||||||||||||||||||||||
Warrants issued | shares | 174,826 | 174,826 | ||||||||||||||||||||||||||
January 2018 Notes [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Conversion price | $ / shares | 0.05 | |||||||||||||||||||||||||||
February 2018 Units Offering [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Description of notes conversion agreement | The Company sold an aggregate of approximately $105 million worth of units (the “Units”) of the Company’s securities to Canaccord Genuity Inc., on behalf of itself and as representative of the underwriters (the “Underwriters”), pursuant to which the Company issued and sold to the Underwriters in a best-efforts underwritten public offering (the Offering) at a purchase price of $5.192 per Unit with each Unit consisting of (A) 7,425,000 Series A-1 units (the “Series A-1 Units”), with each Series A-1 Unit consisting of (i) 0.004 (one pre-split) share of the Company’s common stock, and (ii) 0.004 (one pre-split) Series A-1 warrant to purchase 0.004 (one pre-split) share of the Company’s common stock (a “Series A-1 Warrant”); and (B) 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, 11,675,000 Series B-1 units (the “Series B-1 Units”), consisting of (i) 0.004 (one pre-split) pre-funded Series B-1 warrant to purchase 0.0004 (one pre-split) 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) 0.004 (one pre-split) Series A-1 Warrant. | In addition, the Series A-1 Warrants are subject to adjustment of the applicable exercise price then in effect, if, as of December 17, 2018 (the "Adjustment Date"), the quotient determined by dividing the (x) sum of the VWAP (as defined in the Series A-1 Warrant) of the common stock for each trading day during the 10 consecutive trading day period ending and including the trading day immediately preceding the Adjustment Date, divided by (y) 0.4 (10 pre-split) (all such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period) (the "Adjustment Price"), is less than the applicable exercise price. If the Adjustment Price is less than the applicable exercise price as of the Adjustment Date, then the exercise price shall be automatically adjusted to be equal to the Adjustment Price. | ||||||||||||||||||||||||||
Net proceeds from the sale of units | $ 96,900,000 | |||||||||||||||||||||||||||
Underwriting discounts and commissions | 5,900,000 | |||||||||||||||||||||||||||
Offering expenses | 500,000 | |||||||||||||||||||||||||||
Financial advisory fee | 1,900,000 | |||||||||||||||||||||||||||
April 2018 Units Offering [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Convertible debt contract description | The Company sold an aggregate of approximately $30 million worth of units (the "April 2018 Units") of the Company's securities to Canaccord Genuity Inc., on behalf of itself and as representative of the underwriters (the "April Offering Underwriters"), pursuant to which the Company issued and sold to the April Offering Underwriters in a best-efforts underwritten public offering (the "April 2018 Offering") at a purchase price of $2.59875 per April 2018 Unit with each April 2018 Unit consisting of (A) 10,500,000 Series A-2 units (the "Series A-2 Units"), with each Series A-2 Unit consisting of (i) 0.004 (one pre-split) share (an "April Share") of the Company's common stock, and (ii) 0.004 (one pre-split) Series A-2 warrant to purchase 0.004 (one pre-split) share of common stock (the "Series A-2 Warrants"); and (B) 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 April 2018 Offering, 500,000 Series B-2 units (the "Series B-2 Units", consisting of (i) 0.004 (one pre-split) pre-funded Series B-2 warrant to purchase 0.004 (one pre-split) share of common stock (the "Series B-2 Warrants", and together with the Series A-2 Warrants, the "April Warrants") and (ii) 0.004 (one pre-split) Series A-2 Warrant. The April Shares, Series A-2 Warrants and Series B-2 Warrants were immediately separable. | |||||||||||||||||||||||||||
Net proceeds from the sale of units | 27,500,000 | |||||||||||||||||||||||||||
Underwriting discounts and commissions | 1,700,000 | |||||||||||||||||||||||||||
Offering expenses | 1,000,000 | |||||||||||||||||||||||||||
Additional interest amount | $ 600,000 | |||||||||||||||||||||||||||
Series A-2 Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 750 | $ 750 | ||||||||||||||||||||||||||
Warrants issued | shares | 2,000 | 2,000 | ||||||||||||||||||||||||||
Series A-2 Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 3 | $ 3 | ||||||||||||||||||||||||||
Warrants issued | shares | 500,000 | 500,000 | ||||||||||||||||||||||||||
Series B-2 Warrants [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 687.5 | $ 687.5 | ||||||||||||||||||||||||||
Common stock nominal exercise price | $ / shares | 0.001 | 0.001 | ||||||||||||||||||||||||||
Series B-2 Warrants [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 2.75 | $ 2.75 | ||||||||||||||||||||||||||
June 2018 Convertible Notes and Series A Preferred Stock [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 24,600,000 | $ 24,600,000 | ||||||||||||||||||||||||||
Interest percentage | 1.50% | 1.50% | ||||||||||||||||||||||||||
Interest expenses | $ 5,300 | $ 5,300 | ||||||||||||||||||||||||||
Description of notes conversion agreement | The Company issued and sold 20,500 shares of Series A Preferred Stock of the Company (the “Preferred Stock”) and Series B-2 Senior Convertible Notes in the aggregate principal amount of $164,000,000 (which includes an approximate 15.0% original issue discount) (the “June 2018 Convertible Notes”), for total consideration consisting of an aggregate cash payment to the Company of $20,500,000 and secured promissory notes payable by the June Buyers to the Company (the “June 2018 Investor Notes”) in the aggregate principal amount of $139,400,000, which is subject to a master netting agreement between the Company and the June Buyers (collectively, the “June 2018 Financing”). Unless earlier converted or redeemed, the June 2018 Convertible Notes will mature on June 26, 2020. The maturity date of the June 2018 Investor Notes is June 26, 2060. Upon issuance, (i) $24,600,000 in principal amount of the June 2018 Convertible Notes consisted of “Unrestricted Principal”, which is defined as that portion of the principal amount of June 2018 Convertible Note that may be converted at any time and is not subject to netting against any June 2018 Investor Notes, and (ii) the balance of the principal amount under the June 2018 Convertible Notes, equal to $139,400,000, consisted entirely of “Restricted Principal”, which is defined as that portion of the principal amount of a June 2018 Convertible Note that equals the outstanding principal amount of a corresponding June 2018 Investor Note. | In the event of an event of default interest under the June 2018 Convertible Notes may be increased to 15% during the first 30 days following the occurrence and continuance of an event of default and to 18% thereafter (the "Default Rate"). | ||||||||||||||||||||||||||
Description of convertible debt | The June Buyers had converted $0 of the June 2018 Notes into shares of the Company's Common Stock. On any unfunded principal balance of the June 2018 Investor Notes the Company owed to the June Buyers a 5.25% interest obligation which is due quarterly and calculated on a 360-day basis. For the funded portion of the June 2018 Notes the Company has a 10% interest obligation. | |||||||||||||||||||||||||||
Accrued amount | $ 5,300 | |||||||||||||||||||||||||||
Conversion price | $ / shares | $ 250 | $ 250 | ||||||||||||||||||||||||||
June 2018 Convertible Notes and Series A Preferred Stock [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Conversion price | $ / shares | 1 | 1 | ||||||||||||||||||||||||||
June 2018 Convertible Notes and Series A Preferred Stock [Member] | Subsequent Event [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | $ 250 | |||||||||||||||||||||||||||
Conversion price | $ / shares | $ 0.05 | 250 | ||||||||||||||||||||||||||
June 2018 Convertible Notes and Series A Preferred Stock [Member] | Subsequent Event [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Conversion price | $ / shares | $ 1 | |||||||||||||||||||||||||||
Notice of Potential Delisting from NASDAQ [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Description of notes conversion agreement | The Company’s Common Stock for the purpose of exchanging outstanding warrants to purchase an aggregate of 106,437 (26,609,269 pre-split) shares of Common Stock (the “June Exchange Warrants”) for an aggregate of 90,472 (22,617,879 pre-split) shares of Common Stock (collectively, the “Exchange Shares”), based on a ratio of 0.85 Exchange Shares for each warrant share. | |||||||||||||||||||||||||||
Gain on exchange of warrants | $ 301,500 | |||||||||||||||||||||||||||
MoviePass, Inc. [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Common stock at exercise prices | $ / shares | ||||||||||||||||||||||||||||
Investor [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 25,926,889 | $ 30,432,329 | ||||||||||||||||||||||||||
Interest amount of common stock | $ 3,980,228 | $ 3,980,228 | ||||||||||||||||||||||||||
Converted shares | shares | 411,448 | 235,622 | ||||||||||||||||||||||||||
Investor [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Converted shares | shares | 61,717,150 | 58,905,544 | ||||||||||||||||||||||||||
Investor [Member] | August 2017 Notes [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 0 | $ 0 | ||||||||||||||||||||||||||
Interest expenses | $ 37,126 | $ 37,126 | ||||||||||||||||||||||||||
Description of convertible debt | The Investor had fully prepaid the August 2017 Investor Note and converted $5,794,560 in principal amount, plus accrued interest, of the August 2017 Notes into 5,931 (1,482,639 pre-split) shares of the Company's common stock. 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 | 4,678 | |||||||||||||||||||||||||||
Outstanding balance | $ 4,677,899 | |||||||||||||||||||||||||||
Accrued amount | $ 37,126 | |||||||||||||||||||||||||||
Investor [Member] | August 2017 Notes [Member] | Pre-split [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
New note shares of common stock | shares | 1,169,475 | |||||||||||||||||||||||||||
Investor [Member] | November 2017 Notes [Member] | ||||||||||||||||||||||||||||
Senior Secured Convertible Notes and Warrants and Unit Offerings (Textual) | ||||||||||||||||||||||||||||
Principal amount | $ 100,000,000 |
Common and Preferred Stock (Det
Common and Preferred Stock (Details) - $ / shares | Feb. 05, 2018 | Jul. 23, 2018 | Apr. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Common and Preferred Stock (Textual) | |||||
Stockholders pre-split | (100.8 million pre-split) | ||||
Preferred stock, shares issued | 20,500 | 0 | |||
Common stock voting rights | Each share of Preferred Stock is entitled to 3,205 votes per share on all matters on which holders of common stock are entitled to vote. However, the amount of votes with respect to the Preferred Stock held by any holder, when aggregated with any other voting securities of the Company held by such holder, cannot exceed 19.9% of the Company's outstanding voting power calculated as of June 21, 2018 (or such greater percentage allowed by Nasdaq without any stockholder approval requirements). | ||||
Redemption percentage | 15.00% | ||||
Preferred stock, par value | $ 0.01 | $ 0.01 | |||
Liquidation preference, description | Upon any liquidation, dissolution or winding up of the Company, the holders of the shares of Preferred Stock will be entitled to receive in cash out of the assets of the Company, before any amount is paid to the holders of any junior stock, including common stock of the Company, an amount per share of Preferred Stock equal to 100% of the stated value per share (which is equal to $1,000) plus $0.01. | ||||
Common Stock [Member] | |||||
Common and Preferred Stock (Textual) | |||||
Stockholders pre-split | The Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 100,000,000 to 500,000,000 shares (the “Charter Amendment”). | ||||
Subsequent Event [Member] | Common Stock [Member] | |||||
Common and Preferred Stock (Textual) | |||||
Stockholders pre-split | The Company's stockholders approved an amendment to the Company's Certificate of Incorporation to increase the number of authorized shares of common stock from 500,000,000 to 5,000,000,000 shares and to increase the total number of authorized shares of capital stock from 502,000,000 to 5,002,000,000 (the "Authorized Share Increase"), of which 2,000,000 shares with a par value of one cent ($0.01) per share shall be designated as "Preferred Stock" and 5,000,000,000 shares with a par value of one cent ($0.01) per share shall be designated as "Common Stock." Following the stockholder approval, a Certificate of Amendment to the Company's Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 23, 2018, at which time the Authorized Share Increase became effective. |
Fair Value of Financial Asset56
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Liabilities | ||
Derivative liability - warrants | $ 4,266,100 | $ 67,288,800 |
Derivative liability - conversion feature | 41,537,054 | 4,834,462 |
Total | 45,803,154 | 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 | 4,266,100 | 67,288,800 |
Derivative liability - conversion feature | 41,537,054 | 4,834,462 |
Total | $ 45,803,154 | $ 72,123,262 |
Fair Value of Financial Asset57
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details 1) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis [Abstract] | |
Balance at December 31, 2017 | $ 72,123,262 |
Purchases, issuances and settlements | 330,997,510 |
Conversions to paid in capital | (147,520,666) |
Extinguishment of Convertible Note | (2,707,712) |
Exchange of Warrants | (12,601,487) |
Change in fair value of warrant liabilities | (189,840,088) |
Change in fair value of derivative liabilities | (4,647,665) |
Balance at June 30, 2018 | $ 45,803,154 |
Fair Value of Financial Asset58
Fair Value of Financial Assets and Liabilities Measured on a Recurring Basis (Details 2) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 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 | 145.00% | 45.00% |
Risk free interest rate | 2.18% | 1.06% |
Contractual term (in years) | 1 year 4 months 9 days | 2 months 8 days |
Exercise price | $ 0.25 | $ 0.25 |
Exercise price pre split | $ 0.001 | $ 0.001 |
Maximum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Expected volatility | 160.00% | 270.00% |
Risk free interest rate | 2.72% | 2.20% |
Contractual term (in years) | 5 years | 5 years |
Exercise price | $ 3,015 | $ 3,577.50 |
Exercise price pre split | $ 12.060 | $ 14.310 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - Stock option [Member] | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Option Indexed to Issuer's Equity [Line Items] | |
Outstanding, Options for Common Shares | shares | 28,219,464 |
Granted, Options for Common Shares | shares | 39,809,175 |
Exercised, Options for Common Shares | shares | |
Forfeited, cancelled, expired, Options for Common Shares | shares | |
Outstanding, Options for Common Shares | shares | 68,028,639 |
Vested and exercisable, Options for Common Shares | shares | 22,318,253 |
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 | $ 0.18 |
Outstanding, Remaining Contractual Term | 9 years 1 month 16 days |
Outstanding, Remaining Contractual Term | 9 years 2 months 5 days |
Vested and exercisable, Remaining Contractual Term | 8 years 8 months 26 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 8,313,684 |
Outstanding, Aggregate Intrinsic Value | $ | 1,531,009 |
Vested and exercisable, Aggregate Intrinsic Value | $ | $ 1,032,565 |
Stock Based Compensation (Det60
Stock Based Compensation (Details 1) | 6 Months Ended |
Jun. 30, 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 (Det61
Stock Based Compensation (Details Textual) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Stock Based Compensation (Textual) | |||
Selling, general and administrative expenses | $ 5,681,161 | $ 1,911,144 | |
Unamortized stock compensation expense | 482,521 | ||
Employee Stock Option [Member] | |||
Stock Based Compensation (Textual) | |||
Recognized expense | $ 15,631,605 | ||
Share based compensation expense | $ 1,090,932 | $ 3,087,244 | |
Granted shares | 39,809,175 | ||
Exercise price | $ 0.43 | ||
Weighted average grant date fair value per share of stock options granted | $ 0.16 | ||
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 | |||
Equity incentive plan, description | The Company awarded 1,927 (481,750 pre-split) and 2,027 (506,750 pre-split) shares, respectively, to consultants who provided services to the Company. | ||
Employees [Member] | Consultant [Member] | |||
Stock Based Compensation (Textual) | |||
Shares issued to plan | |||
Equity incentive plan, description | The Company issued 2,000 (500,000 pre-split) and 4,809 (1,202,167 pre-split) shares of common stock to employees and consultants for services provided during 2017. | The Company issued 2,000 (500,000 pre-split) and 4,809 (1,202,167 pre-split) shares of common stock to employees and consultants for services provided during 2017. | |
2014 Equity Incentive Plan [Member] | |||
Stock Based Compensation (Textual) | |||
Terminate date | Mar. 3, 2024 | ||
Equity incentive plan, description | The 2014 Plan as amended set aside and reserved 12,000 (3,000,000 pre-split) 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) 12,000 (3,000,000 pre-split) 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 10,440 (2,610,000 pre-split) shares of common stock remained available for issuance as of June 30, 2018. | ||
2011 Plan [Member] | MoviePass, Inc. [Member] | |||
Stock Based Compensation (Textual) | |||
Common stock for issuance grant | 95,000,000 | 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 | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018Customer | Jun. 30, 2017Customer | Jun. 30, 2018CustomerVendorsegments | Jun. 30, 2017Customer | Dec. 31, 2017CustomerVendorsegments | |
Consulting revenues [Member] | |||||
Concentration of Credit Risk (Textual) | |||||
Number of customers | 4 | 4 | 4 | 4 | |
Concentration risk, percentage | 93.50% | 92.80% | 93.90% | 87.30% | |
Consulting accounts receivables [Member] | |||||
Concentration of Credit Risk (Textual) | |||||
Number of customers | 5 | 4 | |||
Concentration risk, percentage | 87.40% | 62.60% | |||
Consulting accounts payables [Member] | |||||
Concentration of Credit Risk (Textual) | |||||
Number of vendors | Vendor | 3 | 3 | |||
Concentration risk, percentage | 93.40% | 82.70% | |||
Technology accounts payables [Member] | |||||
Concentration of Credit Risk (Textual) | |||||
Number of vendors | Vendor | 4 | 3 | |||
Concentration risk, percentage | 69.10% | 60.80% | |||
Subscription accounts receivables [Member] | |||||
Concentration of Credit Risk (Textual) | |||||
Number of customers | 1 | 2 | |||
Concentration risk, percentage | 82.40% | 100.00% | |||
Subscription accounts payables [Member] | |||||
Concentration of Credit Risk (Textual) | |||||
Number of vendors | segments | 2 | 1 | |||
Concentration risk, percentage | 39.30% | 41.00% |
Commitments and Contingencies63
Commitments and Contingencies (Details) $ in Thousands | Jun. 30, 2018USD ($) |
Commitments and Contingencies [Abstract] | |
Less than 1 year | $ 148,049 |
1 to 3 years | 780,798 |
3 to 5 years | 115,753 |
Thereafter | |
Total | $ 1,044,600 |
Commitments and Contingencies64
Commitments and Contingencies (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments and Contingencies (Textual) | |||||
Rent expense | $ 247,743 | $ 86,217 | $ 461,088 | $ 134,017 | |
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 |
Transactions with Related Par65
Transactions with Related Parties (Details) - USD ($) | Oct. 05, 2017 | May 22, 2018 | Apr. 30, 2018 | Jun. 30, 2018 |
Transactions with Related Parties (Textual) | ||||
Stockholders pre-split | (100.8 million pre-split) | |||
HMIT [Member] | ||||
Transactions with Related Parties (Textual) | ||||
Stockholders pre-split | In exchange for such Lockup Agreement the Company agreed to issue to HMIT 2,000 (500,000 pre-split) shares of HMNY stock. As of June 30, 2018, the shares issuable to HMIT had not yet been issued and accordingly, the. Company accrued $225,000 with respect thereto, representing the value of the shares on May 22, 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 | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Provision for Income Taxes (Textual) | ||||
Tax provision | $ 28,719 | $ 11,373 | $ 36,670 | $ 41,857 |
US statutory tax rates | 21.00% | 35.00% |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||||
Revenue | $ 74,168,734 | $ 1,140,951 | $ 123,611,594 | $ 2,499,013 | ||
Cost of revenue | 178,766,719 | 917,564 | 314,735,695 | 2,023,049 | ||
Gross profit (loss) | (104,597,985) | 223,387 | (191,124,101) | 475,964 | ||
Total operating expenses | 22,040,874 | 2,967,286 | 43,246,751 | 7,578,383 | ||
Loss from operations | (126,638,859) | (2,743,899) | (234,370,852) | (7,102,419) | ||
Total other income/(expense) | 42,992,276 | (2,466,544) | 124,685,995 | (4,575,095) | ||
Provision for income taxes | 28,719 | 11,373 | 36,670 | 41,857 | ||
Total net income (loss) | (63,334,773) | (5,221,816) | (58,158,898) | (11,719,371) | ||
Cash and cash equivalents | 15,512,810 | 1,433,980 | 15,512,810 | 1,433,980 | $ 24,949,393 | $ 2,747,240 |
Accounts receivable | 28,651,739 | 28,651,739 | 27,470,219 | |||
Prepaid expenses and other current assets | 9,362,755 | 9,362,755 | 3,557,811 | |||
Property and equipment | 369,530 | 369,530 | 234,035 | |||
Intangible assets, net | 31,462,246 | 31,462,246 | 28,536,782 | |||
Goodwill | 87,672,135 | 87,672,135 | 79,137,177 | |||
Deposits and other assets | 209,492 | 209,492 | 147,171 | |||
Contract costs | 2,052,882 | 2,052,882 | ||||
Accounts payable and accrued expenses | 21,262,591 | 21,262,591 | 13,144,003 | |||
Liabilities to be settled in stock | 5,988,363 | 5,988,363 | 21,320,705 | |||
Derivative liability | 41,537,054 | 41,537,054 | 4,834,462 | |||
Consulting [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 829,606 | 1,140,951 | 1,669,109 | 2,499,013 | ||
Cost of revenue | 681,577 | 917,564 | 1,392,771 | 2,023,049 | ||
Gross profit (loss) | 148,029 | 223,387 | 276,338 | 475,964 | ||
Total operating expenses | 5,743,072 | 1,349,482 | 14,160,984 | 4,663,029 | ||
Loss from operations | (5,595,043) | (1,126,095) | (13,884,646) | (4,187,065) | ||
Total other income/(expense) | 42,975,245 | (2,449,557) | 124,685,936 | (4,541,120) | ||
Provision for income taxes | (5,219) | 72,341 | (1,043) | 41,857 | ||
Total net income (loss) | 37,374,983 | (3,503,311) | 110,800,247 | (8,686,328) | ||
Cash and cash equivalents | 10,998,366 | 10,998,366 | 569,886 | |||
Accounts receivable | 311,381 | 311,381 | 332,753 | |||
Prepaid expenses and other current assets | 835,212 | 835,212 | 3,382,127 | |||
Property and equipment | 152,415 | 152,415 | 96,464 | |||
Intangible assets, net | 897,504 | 897,504 | ||||
Goodwill | ||||||
Deposits and other assets | 128,625 | 128,625 | 129,119 | |||
Contract costs | ||||||
Accounts payable and accrued expenses | 3,600,737 | 3,600,737 | 2,088,867 | |||
Liabilities to be settled in stock | 5,669,263 | 5,669,263 | 20,875,045 | |||
Convertible notes payable | 311,705 | 311,705 | 3,611,627 | |||
Warrant liability | 4,266,100 | 4,266,100 | 67,288,800 | |||
Derivative liability | 41,537,054 | 41,537,054 | 4,834,462 | |||
Technology [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | ||||||
Cost of revenue | ||||||
Gross profit (loss) | ||||||
Total operating expenses | 937,343 | 1,617,804 | 2,070,791 | 2,915,354 | ||
Loss from operations | (937,343) | (1,617,804) | (2,070,791) | (2,915,354) | ||
Total other income/(expense) | 17,031 | (16,987) | 59 | (33,975) | ||
Provision for income taxes | ||||||
Total net income (loss) | (920,312) | (1,634,791) | (2,070,732) | (2,949,329) | ||
Cash and cash equivalents | 2,577,138 | 2,577,138 | 21,933,765 | |||
Prepaid expenses and other current assets | 8,333 | 8,333 | 21,666 | |||
Property and equipment | 86,562 | 86,562 | 95,301 | |||
Intangible assets, net | 2,108,287 | 2,108,287 | 2,829,295 | |||
Goodwill | 8,534,958 | 8,534,958 | ||||
Deposits and other assets | 10,053 | 10,053 | 10,052 | |||
Accounts payable and accrued expenses | 112,418 | 112,418 | 607,622 | |||
Liabilities to be settled in stock | 319,100 | 319,100 | 445,660 | |||
Subscription and Marketing and Promotional Services [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenue | 73,339,128 | 121,942,485 | ||||
Cost of revenue | 178,085,142 | 313,342,924 | ||||
Gross profit (loss) | 104,746,014 | (191,400,439) | ||||
Total operating expenses | 15,360,459 | 27,014,976 | ||||
Loss from operations | (120,106,473) | (218,415,415) | ||||
Total other income/(expense) | ||||||
Provision for income taxes | (23,500) | (35,627) | ||||
Total net income (loss) | (120,129,973) | (218,451,042) | ||||
Cash and cash equivalents | 1,937,306 | 1,937,306 | 2,445,742 | |||
Accounts receivable | 28,340,358 | 28,340,358 | 27,137,466 | |||
Prepaid expenses and other current assets | 8,519,210 | 8,519,210 | 154,018 | |||
Property and equipment | 130,553 | 130,553 | 42,270 | |||
Intangible assets, net | 29,353,959 | 29,353,959 | 25,707,487 | |||
Goodwill | 79,137,177 | 79,137,177 | 79,137,177 | |||
Deposits and other assets | 70,814 | 70,814 | 8,000 | |||
Contract costs | 2,052,882 | 2,052,882 | ||||
Accounts payable and accrued expenses | 17,549,436 | 17,549,436 | 10,447,514 | |||
Deferred revenue | $ 65,371,837 | $ 65,371,837 | $ 54,425,630 |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 6 Months Ended |
Jun. 30, 2018segments | |
Segment Reporting (Textual) | |
Number of operating segments | 3 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 13, 2018 | Aug. 09, 2018 | Jul. 31, 2018 | Jul. 27, 2018 | Jul. 24, 2018 | Jul. 23, 2018 | Aug. 27, 2017 | Jun. 30, 2018 |
Subsequent Events (Textual) | ||||||||
Payment of company to the holder | $ 2,500,000 | |||||||
Redemption percentage | 15.00% | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Reverse stock split, description | The Company effected a reverse stock-split of its issued and outstanding common stock at a ratio of one-for-250 ("Reverse Stock Split"). The Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware effecting the Reverse Stock Split. The Reverse Stock Split did not affect the number of authorized shares of common stock, which, following the increase in authorized shares effected on July 23, 2018 discussed in Note 11, remains at 5,000,000,000 shares. | |||||||
Reverse stock split authorized shares | 5,000,000,000 | |||||||
Common stock and debt securities, description | The Company has sold 232.4 million shares and received net proceeds of $50.2 million under the ATM Offering. On July 2, 2018, the Company's second universal shelf registration was declared effective under which it may offer for sale up to $1.2 billion of equity or debt securities. | |||||||
Subsequent Event [Member] | Investor Note [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Common stock and debt securities, description | The Company received gross cash proceeds of approximately $31.4 million with respect to funding under the November 2017 and January 2018 investor notes and issued 266.6 million shares with respect to the conversion of its November 2017 Notes and January 2018 Notes. The Company used the proceeds from the prepayments of the investor notes to redeem approximately $22.8 million of the unrestricted principal of its June 2018 Convertible Notes. As a result of such redemptions, as of August 9, 2018, there is approximately $2.4 million unrestricted principal (including certain make-whole interest) outstanding under the June 2018 Convertible Notes. | |||||||
Subsequent Event [Member] | Demand Note [Member] | ||||||||
Subsequent Events (Textual) | ||||||||
Principal amount | $ 6,806,850 | $ 6,200,000 | ||||||
Payment of company to the holder | $ 1,806,850 | |||||||
Interest rate | 10.00% | 15.00% | ||||||
Cash borrowed by the Company | $ 5,000,000 | $ 5,000,000 | ||||||
Percentage of interest rate per year | 15.00% | 130.00% | ||||||
Cash proceeds received | $ 5,000,000 | $ 5,000,000 | ||||||
Payment of outstanding demand notes | $ 6,800,000 | 6,200,000 | ||||||
Original issue discount | $ 1,200,000 | |||||||
Subsequent event, description | The holder could make a demand for full payment of the July 27 Demand Note from and after (x) with respect to up to $3,100,000 of the principal outstanding under the July 27 Demand Note (the "Initial Principal"), August 1, 2018 or (y) with respect to any other amounts then outstanding under the July 27 Demand Note, August 5, 2018. |