Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 10, 2016 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Inventergy Global, Inc. | |
Entity Central Index Key | 1,084,752 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | INVT | |
Entity Common Stock, Shares Outstanding | 11,532,235 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 12,298 | $ 554,556 |
Accounts receivable | 23,061 | 31,941 |
Prepaid expenses and other current assets | 902,325 | 211,088 |
Deferred expenses, current | 105,683 | 78,292 |
Total current assets | 1,043,367 | 875,877 |
Property and equipment, net | 12,510 | 25,263 |
Patents, net | 7,536,686 | 8,669,921 |
Intangible assets, net | 301,333 | 386,083 |
Goodwill | 8,858,504 | 8,858,504 |
Deposits and other assets | 18,993 | 18,993 |
Total assets | 17,771,393 | 18,834,641 |
Current liabilities | ||
Accounts payable | 2,505,462 | 1,846,903 |
Accrued expenses and other current liabilities | 419,993 | 12,726 |
Short-term notes payable, related party | 0 | 100,000 |
Guaranteed payments, current | 2,200,000 | 2,076,767 |
Fortress notes payable, current | 7,134,882 | 5,598,754 |
Deferred revenue | 400,000 | 550,000 |
Total current liabilities | 12,660,337 | 10,185,150 |
Deferred revenue, non-current | 946,429 | 346,429 |
Derivative liabilities | 3,197 | 4,145 |
Fortress notes payable, net of discount | 0 | 2,406,681 |
Fortress revenue share, net of discount | 3,948,153 | 6,034,278 |
Total liabilities | 17,558,116 | 18,976,683 |
Stockholders' equity | ||
Common stock, $0.001 par value; 100,000,000 shares authorized, 4,927,235 and 4,223,124 shares issued and outstanding at September 30, 2016 and December 31, 2015 | 4,927 | 4,223 |
Additional paid-in capital | 60,736,427 | 54,660,497 |
Accumulated deficit | (60,528,081) | (54,806,762) |
Total stockholders' equity | 213,277 | (142,042) |
Total liabilities and stockholders' equity | 17,771,393 | 18,834,641 |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized | 1 | 0 |
Series D Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized | 0 | 0 |
Series E Convertible Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized | $ 3 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 4,927,235 | 4,223,124 |
Common Stock, Shares, Outstanding | 4,927,235 | 4,223,124 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock shares designated | 2,500 | 2,500 |
Preferred stock, shares issued | 751 | 0 |
Preferred stock, shares outstanding | 751 | 0 |
Temporary equity, liquidation preference | $ 751,000 | $ 0 |
Series D Convertible Preferred Stock [Member] | ||
Preferred stock shares designated | 1,500 | 1,500 |
Preferred stock, shares issued | 369 | 0 |
Preferred stock, shares outstanding | 369 | 0 |
Temporary equity, liquidation preference | $ 369,000 | $ 0 |
Series E Convertible Preferred Stock [Member] | ||
Preferred stock shares designated | 3,000 | 3,000 |
Preferred stock, shares issued | 3,000 | 0 |
Preferred stock, shares outstanding | 3,000 | 0 |
Temporary equity, liquidation preference | $ 3,000,000 | $ 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues | $ 106,095 | $ 132,500 | $ 1,674,275 | $ 4,483,303 |
Operating Expenses | ||||
Cost of revenues | 35,736 | 51,651 | 356,750 | 913,800 |
Patent amortization expense | 377,746 | 377,742 | 1,133,235 | 1,152,365 |
General and administrative | 1,620,311 | 1,930,705 | 5,006,810 | 5,921,212 |
Total operating expenses | 2,033,793 | 2,360,098 | 6,496,795 | 7,987,377 |
Income (loss) from operations | (1,927,698) | (2,227,598) | (4,822,520) | (3,504,074) |
Other income (expense) | ||||
Gain (loss) on debt extinguishment | 0 | 0 | 2,434,661 | (2,268,373) |
Decrease in fair value of derivative liabilities | 330 | 35,010 | 948 | 47,331 |
Interest expense, net | (867,713) | (1,278,279) | (2,867,741) | (3,770,231) |
Total other income (expense), net | (867,383) | (1,243,269) | (432,132) | (5,991,273) |
Income (loss) before provision for income taxes | (2,795,081) | (3,470,867) | (5,254,652) | (9,495,347) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income (loss) | (2,795,081) | (3,470,867) | (5,254,652) | (9,495,347) |
Deemed dividend on preferred stock | 0 | 0 | (466,667) | 0 |
Net loss attributable to common shareholders | $ (2,795,081) | $ (3,470,867) | $ (5,721,319) | $ (9,495,347) |
Basic and diluted loss per share (in dollars per share) | $ (0.57) | $ (0.98) | $ (1.26) | $ (2.95) |
Weighted average shares outstanding, basic and diluted (in shares) | 4,910,740 | 3,542,520 | 4,529,568 | 3,223,348 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (5,254,652) | $ (9,495,347) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation expense | 12,753 | 12,753 |
(Gain) loss on debt extinguishment | (2,434,661) | 2,268,373 |
Decrease in fair value of derivative liabilities | (948) | (47,331) |
Amortization of discount on notes payable | 2,064,774 | 2,191,248 |
Accrued interest on patents purchased | 123,233 | 0 |
Amortization of patents and acquired contracts | 1,217,985 | 1,237,115 |
Net cost of patents sold | 0 | 215,372 |
Stock-based compensation | 545,626 | 843,386 |
Changes in operating assets and liabilities | ||
Accounts receivable | 8,880 | 219,851 |
Inventories | 0 | 130,155 |
Prepaid expenses and other current assets, net | (646,943) | (21,441) |
Deferred expenses | (27,391) | 300,833 |
Deposits and other assets | 0 | (10,000) |
Accounts payable | 777,559 | 114,512 |
Accrued expenses and other current liabilities | 407,267 | 483,961 |
Deferred revenue | 450,000 | 746,429 |
Net cash used in operating activities | (2,756,518) | (810,131) |
Cash flows from financing activities | ||
Proceeds from issuance of preferred stock, net of issuance costs | 5,221,998 | 0 |
Proceeds from issuance of common stock, net of issuance costs | 1,182,278 | 1,835,000 |
Proceeds from issuance of notes payable | 0 | 1,126,900 |
Payments on Fortress notes payable | (1,640,016) | (2,147,000) |
Redemption of preferred stock | (2,500,000) | 0 |
Payments on related party note payable | (50,000) | (80,000) |
Net cash provided by financing activities | 2,214,260 | 734,900 |
Net decrease in cash and cash equivalents | (542,258) | (75,231) |
Cash and cash equivalents, beginning of period | 554,556 | 1,443,349 |
Cash and cash equivalents, end of period | 12,298 | 1,368,118 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 613,600 | 631,471 |
Supplemental disclosures of non-cash investing and financing activities | ||
Accrued guaranteed payments and deferred expenses related to purchased patents | 0 | 923,928 |
Conversion of portion of short term note payable, related party, to purchase common stock | 0 | 100,000 |
Fair value of common stock warrants | $ 4,154,620 | $ 41,305 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Inventergy Global, Inc. (“we”, “us”, “our” “Inventergy” or the “Company”) is an intellectual property (IP) investment and licensing company that helps leading technology corporations attain greater value from their IP assets in support of their business objectives and corporate brands. Inventergy, Inc. was initially organized as a Delaware limited liability company under the name Silicon Turbine Systems, LLC in January 2012. It subsequently changed its name to Inventergy, LLC in March 2012 and it was converted from a limited liability company into a Delaware corporation in February 2013. On June 6, 2014, a subsidiary (“Merger Sub”) of eOn Communications Corporation (“eOn”) merged with and into Inventergy, Inc. (the “Merger”). As a result of the Merger, eOn changed its name to “Inventergy Global, Inc.” The Company is headquartered in Campbell, California. The Company operates in a single industry segment. In June 2014, in conjunction with the Merger, the Company effected a one-for-two reverse split of its common stock. In December 2015, the Company effected a one-for-ten reverse split of its common stock. All share and per share amounts are reflective of these splits. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The consolidated financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. The accompanying interim financial statements are condensed and should be read in conjunction with the Company’s latest annual financial statements. It is management’s opinion that all adjustments necessary for a fair presentation of the results for the interim periods have been made, and all such adjustments were of a normal recurring nature. At September 30, 2016, the Company had an accumulated deficit since inception of $ 60,528,081 2,795,081 11,616,970 2,000,000 1,126,900 1,835,000 4,000,000 2,175,000 250,000 1,200,000 1,300,000 3,000,000 2,800,000 2,500,000 70 5,100,000 1,300,000 The business will require significant additional capital and/or patent monetization revenues to continue operations and execute the Company’s longer term business plan. Based on the Company’s updated internal financial plan covering the next fifteen months (through December 31, 2017), we will require approximately $ 5,000,000 2,800,000 1,500,000 800,000 5,700,000 2,200,000 3,500,000 7,400,000 To date, the Company has acquired an aggregate of approximately 755 currently active patents and patent applications for aggregate purchase payments of $ 12,109,118 2,200,000 The Company may also require additional financing for the purchase of additional patent portfolios and to fund its monetization efforts if new attractive opportunities are found. In the event the Company acquires additional large patent portfolios, in addition to the cost of the upfront purchase fee (if any) it is likely that additional resources (business, technical or legal) may be required to effectively monetize the portfolio. Resources to analyze new portfolios are already part of the current staffing of the Company. Litigation costs are based primarily on a contingent fee structure (expected to average less than 20% of license revenue for a portfolio) and as such do not scale significantly with the acquisition of new portfolios The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Although these estimates reflect management's best estimates, it is at least reasonably possible that a material change to these estimates could occur in the near term. The Company considers all highly liquid financial instruments with original maturities of three months or less at the time of purchase to be cash equivalents. Accounts receivable are stated net of allowances for doubtful accounts. The Company typically grants standard credit terms to customers in good credit standing. The Company generally reserves for estimated uncollectible accounts on a customer-by-customer basis, which requires the Company to judge each individual customer’s ability and intention to fully pay account balances. The Company makes these judgments based on knowledge of and relationships with customers and current economic trends, and updates these estimates on a monthly basis. Any changes in estimates, which could be significant, are included in earnings in the period in which the change in estimate occurs. As of September 30, 2016, the Company has established a reserve of $ 22,350 Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets (or the term of the lease, if shorter), which range from three to five years. Routine maintenance and repair costs are expensed as incurred. The costs of major additions, replacements and improvements are capitalized. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation is removed and any resulting gain or loss is credited or charged to operations. Patents, including acquisition costs, are stated at cost, less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the respective assets, generally 7 10 Intangible assets consist of certain contract rights acquired in the Merger. Intangible assets are amortized on a straight-line basis over their estimated useful life of five years. Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired by the Company. The carrying amount of goodwill will be tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company determined that it is a single reporting unit for the purpose of goodwill impairment tests. For purposes of assessing the impairment of goodwill, the Company estimates the value of the reporting unit using independent valuation and/or other market validation of certain asset values as the best evidence of fair value. This fair value is then compared to the carrying value of the reporting unit. The Company evaluates the carrying value of long-lived assets on an annual basis, or more frequently whenever circumstances indicate a long-lived asset may be impaired. When indicators of impairment exist, the Company estimates future undiscounted cash flows attributable to such assets. In the event cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair value. Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. Cash and cash equivalents are deposited with high quality financial institutions. Periodically, such balances are in excess of federally insured limits. The Company has a stock option plan under which incentive and non-qualified stock options and restricted stock awards (“RSAs”) are granted primarily to employees. All share-based payments to employees, including grants of employee stock options and RSAs, are recognized in the financial statements based on their respective grant date fair values. The benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash flow. The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods in the Company’s statements of comprehensive income or loss. The Company has estimated the fair value of each option award as of the date of grant using the Black-Scholes option pricing model. The fair value of RSAs is calculated as the fair value of the underlying stock multiplied by the number of shares awarded. The awards issued consist of fully-vested stock awards, performance-based restricted shares, and service-based restricted shares. Expenses related to stock-based awards issued to non-employees are recognized at fair value on a recurring basis over the expected service period. The Company estimates the fair value of the awards using the Black-Scholes option pricing model. The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when it is more likely than not that deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future pretax earnings, the reversal of temporary differences between book and tax income, and the expected tax rates in future periods. The Company has a full valuation allowance on all deferred tax assets. The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized. The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs within the fair value hierarchy. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The following methods and assumptions were used to estimate the fair value of financial instruments: ⋅ Level 1 - Valuation is based upon quoted prices for identical instruments traded in active markets. ⋅ Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. ⋅ Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. The category within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2019 and early adoption is permitted. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”); ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”); and ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”). The Company must adopt ASU 2016-08, ASU 2016-10 and ASU 2016-12 with ASU 2014-09 (collectively, the “new revenue standards”). The new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the timing of its adoption and the impact of adopting the new revenue standards on its consolidated financial statements. In August 2014, the FASB issued a new accounting standard which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in certain circumstances. ASU 2014-15 Presentation of Financial Statements - Going Concern is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact of this accounting standard. In April 2015, the FASB issued a new accounting standard which changes the presentation of debt issuance costs in financial statements. Under the new standard, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The Company adopted this standard beginning in 2016, and its adoption did not have a material impact on our financial position or results of operations. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The amendments under this pronouncement will change the way all leases with a duration of one year of more are treated. Under this guidance, lessees will be required to capitalize virtually all leases on the balance sheet as a right-of-use asset and an associated financing lease liability or capital lease liability. The right-of-use asset represents the lessee’s right to use, or control the use of, a specified asset for the specified lease term. The lease liability represents the lessee’s obligation to make lease payments arising from the lease, measured on a discounted basis. Based on certain characteristics, leases are classified as financing leases or operating leases. Financing lease liabilities, those that contain provisions similar to capitalized leases, are amortized like capital leases are under current accounting, as amortization expense and interest expense in the statement of operations. Operating lease liabilities are amortized on a straight-line basis over the life of the lease as lease expense in the statement of operations. This update is effective for annual reporting periods, and interim periods within those reporting periods, beginning after December 15, 2018. The Company is currently evaluating the impact this standard will have on its policies and procedures pertaining to its existing and future lease arrangements, disclosure requirements and on its consolidated financial statements. In March 2016, the FASB issued a new accounting standard for employee share-based payments accounting. The accounting standard primarily affects the accounting for forfeitures, minimum statutory tax withholding requirements, and income tax effects related to share-based payments at settlement (or expiration). The accounting standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. |
Patents
Patents | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents | 3. Patents Patent intangible assets consisted of the following at September 30, 2016: Weighted Gross Carrying Accumulated Net Carrying Amortizable intangible assets: Patents 6.15 years $ 11,893,745 $ (4,357,059) $ 7,536,686 Total patent intangible assets $ 11,893,745 $ (4,357,059) $ 7,536,686 The Company expects its amortization expenses to be approximately $ 1,510,977 1,481,270 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements September 30, 2016 Fair Value (Level 1) (Level 2) (Level 3) Common stock warrants $ 3,197 $ - $ - $ 3,197 Total $ 3,197 $ - $ - $ 3,197 December 31, 2015 Fair Value (Level 1) (Level 2) (Level 3) Common stock warrants $ 4,145 $ - $ - $ 4,145 Total $ 4,145 $ - $ - $ 4,145 As discussed in Note 6, in January 2014, the Company issued warrants to purchase 23,858 30.40 22.70 Expected volatility 65 % Risk free rate 0.81 % Dividend yield 0 % Expected term (in years) 2.33 The assumptions utilized were derived in a similar manner as discussed in Note 7 related to the fair value of stock options. The Company revalues the derivative liabilities at the end of each reporting period using the same models as at issuance, updated for new facts and circumstances, and recognizes the change in the fair value in the statements of operations as other income (expense). Common Balance at December 31, 2014 $ 30,278 Fair value at issuance 41,305 Change in fair value (47,331) Balance at September 30, 2015 $ 24,252 Balance at December 31, 2015 $ 4,145 Change in fair value (948) Balance at September 30, 2016 $ 3,197 |
Borrowing Arrangements
Borrowing Arrangements | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Borrowing Arrangements | 5. Borrowing Arrangements On September 23, 2014, the Company entered into a Share Purchase Agreement with Joseph W. Beyers, the Company’s Chairman and Chief Executive Officer, pursuant to which the Company agreed to issue Mr. Beyers up to 23,364 21.40 500,000 300,000 6 300,000 100,000 4.60 21,740 4.60 150,000 50,000 On October 1, 2014 the Company and its wholly-owned subsidiary, Inventergy, Inc., entered into the Revenue Sharing and Note Purchase Agreement with entities affiliated with Fortress Investment Group, LLC, including a Note Purchaser (as defined below) who also serves as collateral agent (the “Collateral Agent”) and a Revenue Participant (as defined below). On February 25, 2015, the Company, Inventergy, Inc. and Fortress entered into the Amended and Restated Revenue Sharing and Note Purchase Agreement (the “Amended Fortress Agreement”). Pursuant to the Fortress Agreement, the Company issued an aggregate of $ 12,199,500 11,137,753 476,868 385,000 The principal of the Fortress Notes and all unpaid interest thereon or other amounts owing hereunder are due in full in cash by the Company on September 30, 2017 (the “Maturity Date”). The Company may prepay the Fortress Notes in whole or in part. In addition, upon the earlier of the date on which all obligations of the Fortress Notes are paid in full or become due, the Company will pay to the Note Purchasers a termination fee equal to $ 853,965 3,787,016 Upon receipt of any revenues generated from the monetization of the Patents (the “Monetization Revenue”) from the patents identified in the Fortress Agreement (the “Patents”), the Company is required to apply, towards its obligations pursuant to the Fortress Notes, 100% of the difference between (a) any revenues generated from the Monetization Revenue less (b) any litigation or licensing related third party expenses (including fees paid to the original patent owners) reasonably incurred by the Company to earn Monetization Revenue, subject to certain limits (such difference defined as “Monetization Net Revenues”). Pursuant to the Amended Fortress Agreement, the Company granted to the purchasers identified in the Fortress Agreement (the “Revenue Participants”) a right to receive a portion of the Company’s Monetization Revenues totaling $11,284,538 (the “Revenue Stream”). The Revenue Participant’s proportionate share is equal to 75% of Monetization Net Revenues until $5,000,000 has been paid to the Revenue Participants, then 50% of Monetization Net Revenues until the remaining $6,284,538 has been paid to the Revenue Participants. All Revenue Stream Payments will be payable on a monthly basis in arrears. The rights of the Revenue Participants to the Revenue Stream are secured by all of the Company’s current patent assets and the Cash Collateral Account, in each case junior in priority to the rights of the Note Purchasers. In connection with the Revenue Participants’ right to receive a portion of the Company’s Monetization Revenues, the Company has recorded a net liability of $3,948,153, which represents the amount of the expected Monetization Revenues, discounted 18% over the expected life of the revenue share agreement. In conjunction with an amendment to the Amended Fortress Agreement dated March 1, 2016, the Company determined that the change in expected cash flows was greater than 10% as compared to the previous agreement and, therefore, a debt extinguishment was deemed to have occurred. When recording the new present value of the debt and revenue share, which was computed using a discount rate of 18%, a gain on debt extinguishment of $2,434,661 was recognized As part of the Fortress Agreement, the Company and the Collateral Agent entered into a Patent License Agreement (the “Patent License Agreement”) under which the Company agreed to grant to the Collateral Agent a non-exclusive, royalty-free, worldwide license to certain of its Patents (the “Licensed Patents”), which can only be used by the Collateral Agent following an occurrence and during the continuance of an event of default of the Fortress Agreement. When the Original Fortress Notes and Revenue Stream are paid in full, the Patent License Agreement will terminate. As part of the transaction, the Company granted the Note Purchasers and Revenue Participants a first priority security interest in all of the Company’s currently owned patent assets and all proceeds thereof, as well as a general security interest in all of the assets of the Company and its subsidiaries. The Note Purchasers and Revenue Participants do not have a security interest in any future patent purchases made by the Company. Under the Fortress Agreement, the Company is required to make monthly amortization payments (the “Amortization Payments”) in an amount equal to (x) the then outstanding principal amount divided by (y) the number of months left until the Maturity Date. Such Amortization Payments were originally due to commence on the last business day of October 2015, but were deferred to October 30, 2016 by various amendments to the Fortress Agreement, as more fully described below. In addition, under the Fortress Agreement, the Company is required to maintain a minimum of $ 1,000,000 1,000,000 2.005 Years ending December 31: 2016 $ 2,275,772 2017 6,931,526 Total $ 9,207,298 Unregistered Sales of Equity Securities. In connection with the execution of the Fortress Agreement, the Company issued 50,000 20.00 1,000,000 50,000 11.40 2.54 In connection with the closing of the transactions contemplated by the Fortress Agreement, the Company paid a closing fee of $ 330,000 24,750 20.00 153,759 Expected volatility 60 % Risk free rate 1.62 % Dividend yield 0 % Expected term (in years) 5.00 The assumptions utilized were derived in a similar manner as discussed in Note 7 related to the fair value of stock options. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders Equity Note [Abstract] | |
Stockholders' Equity | 6. Stockholders’ Equity Common stock The Company is authorized to issue up to 110,000,000 100,000,000 10,000,000 On May 16, 2016, the Company entered into a securities purchase agreement (the “2016 Purchase Agreement”) with certain investors (the “2016 Purchasers”) pursuant to which the Company sold 648,000 2.005 1.3 100 2.005 116,932 On March 31, 2015, the Company entered into a securities purchase agreement (“2015 Purchase Agreement”) with certain investors (the “2015 Purchasers”) pursuant to which the Company sold 467,392 4.60 2.15 In connection with the 2015 Registered Direct Offering, the Company entered into a placement agent agreement (the “2015 Placement Agent Agreement”) with Ladenburg Thalmann & Co. Inc. (“Ladenburg”) to act as its exclusive placement agent. Pursuant to the 2015 Placement Agent Agreement, the Company paid to Ladenburg $ 106,000 5,762 5.75 50,000 10,870 In connection with the 2015 Registered Direct Offering, the Company entered into a separate waiver agreement with one of its current stockholders pursuant to which the holder waived its right to participate in the 2015 Registered Direct Offering (the “Right of Participation”). In consideration for such waiver, the Company paid to the holder $ 35,000 Series C convertible preferred stock 500,668 Series D convertible preferred stock 186,367 Series E convertible preferred stock 1,496,262 Options to purchase common stock 514,772 Shares reserved for issuances pursuant to 2014 Stock Plan 175,046 Warrants 4,615,849 Total 7,488,964 Convertible preferred stock Convertible Original Shares Shares Shares Liquidation Series A-1 $ 0.0100 5,000,000 5,000,000 0 $ - Series A-2 $ 1.6996 1,176,748 1,176,748 0 $ - Series B $ 1,000.00 2,750 2,750 0 $ - Series C $ 1,000.00 2,500 2,500 751 $ 751,000 Series D $ 1,000.00 1,500 369 369 $ 369,000 Series E $ 1,000.00 3,000 3,000 3,000 $ 3,000,000 In October 2015, the Company entered into agreements with holders of all of the outstanding Series A and Series B Preferred Stock pursuant to which the holders agreed to exchange all of their outstanding shares of Series A and Series B Preferred Stock for common stock. As a result, as of September 30, 2016, there were no remaining shares of Series A or Series B Preferred Stock outstanding. The previously-outstanding Preferred Stock amounts, along with the newly-issued common stock amounts, are as follows: Outstanding as of Sept. 30, 2015 Common Stock Issued Series A-1 212,466 141,262 Series A-2 161,355 28,518 Series B 1,102 420,956 On January 21, 2016, the Company entered into a securities purchase agreement (the “Series C Purchase Agreement”) with certain institutional accredited investors (the “Series C Investors”). Pursuant to the Series C Purchase Agreement, the Company sold to the Series C Investors in a private placement 2,500 1,000 2.5 1,666,668 1.50 466,667 Each Series C Investor also received a common stock purchase warrant (the “Series C Warrants”) to purchase up to a number of shares of common stock equal to 85 1.50 1,416,668 1.79 The Series C Purchase Agreement requires the Company to hold a special meeting of stockholders to seek the approval of the holders of its common stock for the issuance of the number of shares of common stock issuable upon the conversion of the Series C Preferred Stock in excess of 19.99% of the outstanding Common Stock and the removal of the Adjustment Floor within 120 days of the execution of the Purchase Agreement (the “Shareholder Approval”). The Company obtained Shareholder Approval on June 28, 2016. Additionally, until the Series C Preferred Stock is no longer outstanding, the Series C Investors may participate in future offerings for up to 50% of the amount of such offerings. The Company utilized a Placement Agent who received a commission equal to 10 250,000 25,000 50,000 On May 13, 2016, the Company entered into, and consummated the transactions contemplated by, a securities purchase agreement (the “Series D Purchase Agreement”) with certain accredited investors (the “Series D Investors”). Pursuant to the Series D Purchase Agreement, the Company sold to the Series D Investors in a private placement 369 1,000 369,000 144,000 The Series D Preferred Stock is immediately convertible into shares of the Company’s common stock, subject to certain beneficial ownership limitations, at an initial conversion price equal to $ 1.98 Each Investor also received a common stock purchase warrant (the “Series D Warrants”) to purchase up to a number of shares of common stock equal to 85 1.87 On July 21, 2016, the Company entered into a securities purchase agreement (the “Series E Purchase Agreement”) with certain institutional accredited investors (the “Investors”). Pursuant to the Series E Purchase Agreement, the Company sold to the Investors in a private placement 3,000 1,000 3.0 1,496,262 2.005 (a) the conversion price then in effect or (b) 65% of the volume weighted average price of the Company’s common stock for ten consecutive days prior to the applicable conversion date. The Series E Preferred Stock contains provisions providing for an adjustment in the conversion price upon the occurrence of certain events, including stock splits, stock dividends, and fundamental transactions. However, in no event may the conversion price be lower than $0.25 per share. The Company may redeem some or all of the Series E Preferred Stock for cash as follows: (i) on or prior to September 25, 2016, in an amount equal to 126% of the aggregate stated value then outstanding, (ii) after September 25, 2016 and on or prior to January 25, 2017, in an amount equal to 144% of the aggregate stated value then outstanding and (iii) after January 25, 2017, in an amount equal to 150% of the aggregate stated value then outstanding. Each Investor also received a common stock purchase warrant (the “Series E Warrants”) to purchase up to a number of shares of common stock equal to 85 2.005 The Series E Purchase Agreement requires, if necessary, that the Company hold a special meeting of stockholders to seek the approval of the holders of its common stock for the issuance of the number of shares of common stock issuable upon the conversion of the Series E Preferred Stock in excess of 19.99% of the outstanding common stock (the “Shareholder Approval”). Until the Company obtains the Shareholder Approval, the conversion of the Series E Preferred Stock is limited to 19.99% of the currently outstanding common stock. Additionally, until the Series E Preferred Stock is no longer outstanding, the Investors may participate in future offerings for up to 50% of the amount of such offerings. The Series E Purchase Agreement contains customary representations, warranties, and covenants, including covenants relating to public reporting obligations, Shareholder Approval and the use of proceeds. The closing of the transaction occurred on July 25, 2016. The Company used the proceeds from the sale of the Series E Preferred Stock to redeem the majority of the Company’s outstanding Series C Convertible Preferred Stock and for general working capital purposes. Pursuant to the Series E Purchase Agreement, upon redemption of the Series C Preferred Stock, the Investors (each of whom is also a holder of the Series C Preferred Stock) shall receive an additional premium such that the aggregate redemption amount is 162 Warrants In January 2014, the Company issued warrants to purchase 23,858 30.40 22.70 348,963 On November 1, 2014 the Company issued 27,750 20.70 164,196 Warrants Remaining Contractual Weighted Average 1,000,000 6.89 $ 2.005 1,271,826 4.81 $ 2.005 648,000 4.63 $ 2.01 158,416 4.62 $ 1.87 1,416,668 4.31 $ 1.79 50,000 5.41 $ 2.54 10,870 3.52 $ 4.60 5,762 3.52 $ 5.75 27,449 3.09 $ 20.00 23,858 2.33 $ 22.70 3,000 1.08 $ 26.60 4,615,849 5.05 $ 2.18 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Workers Compensation Discount [Abstract] | |
Stock-Based Compensation | 7. Stock-Based Compensation In November 2013, the Board of Directors authorized the 2013 Stock Plan (such plan has since been adopted by the stockholders of the Company in connection with the Merger and renamed the “Inventergy Global, Inc. 2014 Stock Plan,” and referred to herein as the “Plan” or the “2014 Plan”). Under the Plan, the Board of Directors may grant incentive stock awards to employees and directors, and non-statutory stock options to employees, directors and consultants, as well as restricted stock. The Plan provides for the grant of stock options, restricted stock, and other stock-related and performance awards that may be settled in cash, stock or other property. The Board of Directors originally reserved 360,545 170,000 250,000 Options and RSAs Outstanding Shares Available Number of Weighted Average Exercise Balance at December 31, 2015 71,431 369,887 $ 4.64 Authorized 250,000 Options forfeited 153,098 (153,098) $ 3.10 Options granted (305,000) 305,000 $ 1.41 Options expired 5,517 (7,017) $ 34.73 Balance at September 30, 2016 175,046 514,772 $ 2.77 Total vested and expected to vest shares (options) 514,772 $ 2.77 Total vested shares (options) 128,556 $ 5.79 As of September 30, 2016, all of the restricted stock granted under the Plan had vested. The aggregate intrinsic value of stock options outstanding, stock options vested and expected to vest, and exercisable at September 30, 2016 was $ 24,400 Prior to the Plan being established, the Company granted the equivalent of 1,413,904 148,144 113,388 As part of the Merger, 1,500 143.00 Options Outstanding Options Vested Exercise Shares Weighted- Weighted- Shares Weighted- $ 1.41 305,000 9.81 $ 1.41 - $ - $ 3.10 182,528 9.05 $ 3.10 101,312 $ 3.10 $ 5.60 2,500 0.58 $ 5.60 2,500 $ 5.60 $ 11.40 17,674 0.58 $ 11.40 17,674 $ 11.40 $ 30.40 7,070 0.58 $ 30.40 7,070 $ 30.40 514,772 9.05 $ 2.77 128,556 $ 5.79 Stock-based compensation expense 2016 2015 Expected volatility 68 64 % Risk free rate 1.18 1.48 % Dividend yield 0 0 % Expected term (in years) 5.70 6.06 The expected term of the options is based on the average period the stock options are expected to remain outstanding based on the option’s vesting term and contractual terms. The expected stock price volatility assumptions for the Company’s stock options were determined by examining the historical volatilities for industry peers, as the Company did not have any trading history for the Company’s common stock. The risk-free interest rate assumption is based on the U.S. Treasury instruments whose term was consistent with the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. Forfeitures were estimated based on the Company’s estimate of future cancellations. For the three months ended Sept. 30 For the nine months ended Sept. 30 2016 2015 2016 2015 General and administrative $ 152,170 $ 246,485 $ 545,626 $ 843,386 No income tax benefit has been recognized related to stock-based compensation expense and no tax benefits have been realized from the exercise of stock awards for the three and nine months ended September 30, 2016. As of September 30, 2016, there were total unrecognized compensation costs of $ 635,906 1.79 Non-employee stock-based compensation expense The Company has issued options and restricted stock awards to non-employees in exchange for services with vesting specific to each individual award. Non-employee stock-based compensation expense is recognized as the awards vest and totaled $ 77,672 41,381 297,693 258,053 Cancellation of Options On March 25, 2015, the Company cancelled certain unvested options (totaling 143,266 20.50 38.50 10 1 4 126,985 2.1 3.1 16,282 11.40 48 On October 16, 2015, the Company cancelled certain unvested options (totaling 177,446 6.90 38.50 10 142,063 35,383 3.10 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes On a quarterly basis, the Company records income tax expense or benefit based on year-to-date results and expected results for the remainder of the year. The Company recorded no provision for income taxes for the three and nine-month periods ended September 30, 2016 and 2015. Deferred income taxes reflect the tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Based on the Company’s historical net losses during its development stage, the Company has provided a full valuation allowance against its deferred tax assets as of September 30, 2016 and 2015. At December 31, 2015, the Company had federal and California net operating loss carryforwards, prior to any annual limitation, of approximately $ 48.8 11.3 30.4 The Company files income tax returns in the U.S. and various state jurisdictions including California. In the normal course of business, the Company is subject to examination by taxing authorities including the United States and California. The Company is not currently under audit or examination by either of these jurisdictions. The federal and California statute of limitations remains open back to 2011 for federal and 2010 for California. However, due to the fact that the Company has net operating losses carried forward dating back to 2001, certain items attributable to technically closed years are still subject to adjustment by the relevant taxing authority through an adjustment to the tax attributes carried forward to open years. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Operating lease In March 2014, the Company entered into a non-cancelable 38-month lease agreement for offices in Campbell, California commencing June 1, 2014 with escalating rent payments ranging from approximately $ 9,200 9,800 18,993 Years ending December 31: 2016 29,394 2017 68,587 Total $ 97,981 Rent expense was $ 27,152 81,454 Guaranteed Payments The Company entered into two agreements to purchase certain patent assets under which guaranteed payments were originally required. The first agreement originally required unconditional guaranteed payments of $ 18,000,000 12 16.3 1.0 16.3 The second agreement originally required a $ 2,000,000 550,000 1,650,000 95,000 2,200,000 |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | 10. Legal Proceedings In 2015, a third party filed an action against the Company alleging, among other items, non-infringement of seven patents from Inventergy, Inc.’s patent portfolio. The Company and Inventergy, Inc. counterclaimed for infringement of the same seven patents, and Inventergy, Inc. also filed an action alleging infringement of an additional patent. Following a period of mediation and settlement discussions, in June 2016, the parties entered into a patent license and settlement agreement pursuant to which, among other provisions, the third party paid an undisclosed license fee to Inventergy, Inc. and each party released the other from all previous claims. The Company has no further obligations relating to this patent license. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Event Registered Public Offering On October 12, 2016, the Company completed a registered public offering (the “Offering”) of shares of common stock and warrants with gross proceeds of approximately $ 6.0 6,000,000 1.00 6,000,000 1.00 5.1 1.3 3.8 1.43 1.86 15 Modification of the Amended Fortress Agreement On November 14, 2016, the Company and Fortress entered into the Sixth Amendment to the Amended Fortress Agreement. The amendment deferred amortization and interest payments and suspended the requirement to maintain a $ 1 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The consolidated financial statements have been prepared on the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation. The accompanying interim financial statements are condensed and should be read in conjunction with the Company’s latest annual financial statements. It is management’s opinion that all adjustments necessary for a fair presentation of the results for the interim periods have been made, and all such adjustments were of a normal recurring nature. |
Liquidity and Capital Resources | Liquidity and Capital Resources At September 30, 2016, the Company had an accumulated deficit since inception of $ 60,528,081 2,795,081 11,616,970 2,000,000 1,126,900 1,835,000 4,000,000 2,175,000 250,000 1,200,000 1,300,000 3,000,000 2,800,000 2,500,000 70 5,100,000 1,300,000 The business will require significant additional capital and/or patent monetization revenues to continue operations and execute the Company’s longer term business plan. Based on the Company’s updated internal financial plan covering the next fifteen months (through December 31, 2017), we will require approximately $ 5,000,000 2,800,000 1,500,000 800,000 5,700,000 2,200,000 3,500,000 7,400,000 To date, the Company has acquired an aggregate of approximately 755 currently active patents and patent applications for aggregate purchase payments of $ 12,109,118 2,200,000 The Company may also require additional financing for the purchase of additional patent portfolios and to fund its monetization efforts if new attractive opportunities are found. In the event the Company acquires additional large patent portfolios, in addition to the cost of the upfront purchase fee (if any) it is likely that additional resources (business, technical or legal) may be required to effectively monetize the portfolio. Resources to analyze new portfolios are already part of the current staffing of the Company. Litigation costs are based primarily on a contingent fee structure (expected to average less than 20% of license revenue for a portfolio) and as such do not scale significantly with the acquisition of new portfolios |
Management estimates and related risks | Management estimates and related risks The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions about the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the dates of the financial statements and the reported amounts of revenues and expenses during the reported periods. Although these estimates reflect management's best estimates, it is at least reasonably possible that a material change to these estimates could occur in the near term. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid financial instruments with original maturities of three months or less at the time of purchase to be cash equivalents. |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are stated net of allowances for doubtful accounts. The Company typically grants standard credit terms to customers in good credit standing. The Company generally reserves for estimated uncollectible accounts on a customer-by-customer basis, which requires the Company to judge each individual customer’s ability and intention to fully pay account balances. The Company makes these judgments based on knowledge of and relationships with customers and current economic trends, and updates these estimates on a monthly basis. Any changes in estimates, which could be significant, are included in earnings in the period in which the change in estimate occurs. As of September 30, 2016, the Company has established a reserve of $ 22,350 |
Property and equipment, net | Property and equipment, net Property and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets (or the term of the lease, if shorter), which range from three to five years. Routine maintenance and repair costs are expensed as incurred. The costs of major additions, replacements and improvements are capitalized. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation is removed and any resulting gain or loss is credited or charged to operations. |
Patents, net | Patents, net Patents, including acquisition costs, are stated at cost, less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the respective assets, generally 7 10 |
Intangible Assets | Intangible Assets Intangible assets consist of certain contract rights acquired in the Merger. Intangible assets are amortized on a straight-line basis over their estimated useful life of five years. |
Goodwill | Goodwill Goodwill represents the excess of the aggregate purchase price over the fair value of the net tangible and identifiable intangible assets acquired by the Company. The carrying amount of goodwill will be tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company determined that it is a single reporting unit for the purpose of goodwill impairment tests. For purposes of assessing the impairment of goodwill, the Company estimates the value of the reporting unit using independent valuation and/or other market validation of certain asset values as the best evidence of fair value. This fair value is then compared to the carrying value of the reporting unit. |
Impairment of long-lived assets | Impairment of long-lived assets The Company evaluates the carrying value of long-lived assets on an annual basis, or more frequently whenever circumstances indicate a long-lived asset may be impaired. When indicators of impairment exist, the Company estimates future undiscounted cash flows attributable to such assets. In the event cash flows are not expected to be sufficient to recover the recorded value of the assets, the assets are written down to their estimated fair value. |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. Cash and cash equivalents are deposited with high quality financial institutions. Periodically, such balances are in excess of federally insured limits. |
Stock-based compensation | Stock-based compensation The Company has a stock option plan under which incentive and non-qualified stock options and restricted stock awards (“RSAs”) are granted primarily to employees. All share-based payments to employees, including grants of employee stock options and RSAs, are recognized in the financial statements based on their respective grant date fair values. The benefits of tax deductions in excess of recognized compensation cost are reported as a financing cash flow. The Company estimates the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service periods in the Company’s statements of comprehensive income or loss. The Company has estimated the fair value of each option award as of the date of grant using the Black-Scholes option pricing model. The fair value of RSAs is calculated as the fair value of the underlying stock multiplied by the number of shares awarded. The awards issued consist of fully-vested stock awards, performance-based restricted shares, and service-based restricted shares. Expenses related to stock-based awards issued to non-employees are recognized at fair value on a recurring basis over the expected service period. The Company estimates the fair value of the awards using the Black-Scholes option pricing model. |
Income taxes | Income taxes The Company accounts for income taxes using the asset and liability method whereby deferred tax asset and liability account balances are determined based on temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. A valuation allowance is established when it is more likely than not that deferred tax assets will not be realized. Realization of deferred tax assets is dependent upon future pretax earnings, the reversal of temporary differences between book and tax income, and the expected tax rates in future periods. The Company has a full valuation allowance on all deferred tax assets. The Company is required to evaluate the tax positions taken in the course of preparing its tax returns to determine whether tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. The amount recognized is subject to estimate and management judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately sustained for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount that is initially recognized. |
Fair value measurements | Fair value measurements The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs within the fair value hierarchy. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about what market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The following methods and assumptions were used to estimate the fair value of financial instruments: ⋅ Level 1 - Valuation is based upon quoted prices for identical instruments traded in active markets. ⋅ Level 2 - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. ⋅ Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. The category within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which amends the existing accounting standards for revenue recognition. ASU 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. ASU 2014-09 will be effective for the Company beginning in its first quarter of 2019 and early adoption is permitted. Subsequently, the FASB has issued the following standards related to ASU 2014-09: ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (“ASU 2016-08”); ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”); and ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”). The Company must adopt ASU 2016-08, ASU 2016-10 and ASU 2016-12 with ASU 2014-09 (collectively, the “new revenue standards”). The new revenue standards may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of adoption. The Company is currently evaluating the timing of its adoption and the impact of adopting the new revenue standards on its consolidated financial statements. In August 2014, the FASB issued a new accounting standard which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period and to provide related footnote disclosures in certain circumstances. ASU 2014-15 Presentation of Financial Statements - Going Concern is effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016. Early adoption is permitted. We are currently evaluating the impact of this accounting standard. In April 2015, the FASB issued a new accounting standard which changes the presentation of debt issuance costs in financial statements. Under the new standard, an entity presents such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs is reported as interest expense. The Company adopted this standard beginning in 2016, and its adoption did not have a material impact on our financial position or results of operations. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” The amendments under this pronouncement will change the way all leases with a duration of one year of more are treated. Under this guidance, lessees will be required to capitalize virtually all leases on the balance sheet as a right-of-use asset and an associated financing lease liability or capital lease liability. The right-of-use asset represents the lessee’s right to use, or control the use of, a specified asset for the specified lease term. The lease liability represents the lessee’s obligation to make lease payments arising from the lease, measured on a discounted basis. Based on certain characteristics, leases are classified as financing leases or operating leases. Financing lease liabilities, those that contain provisions similar to capitalized leases, are amortized like capital leases are under current accounting, as amortization expense and interest expense in the statement of operations. Operating lease liabilities are amortized on a straight-line basis over the life of the lease as lease expense in the statement of operations. This update is effective for annual reporting periods, and interim periods within those reporting periods, beginning after December 15, 2018. The Company is currently evaluating the impact this standard will have on its policies and procedures pertaining to its existing and future lease arrangements, disclosure requirements and on its consolidated financial statements. In March 2016, the FASB issued a new accounting standard for employee share-based payments accounting. The accounting standard primarily affects the accounting for forfeitures, minimum statutory tax withholding requirements, and income tax effects related to share-based payments at settlement (or expiration). The accounting standard is effective for annual reporting periods beginning after December 15, 2017 and interim periods within annual reporting periods beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact of this accounting standard on our consolidated financial statements. |
Patents (Tables)
Patents (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Patent intangible assets consisted of the following at September 30, 2016: Weighted Gross Carrying Accumulated Net Carrying Amortizable intangible assets: Patents 6.15 years $ 11,893,745 $ (4,357,059) $ 7,536,686 Total patent intangible assets $ 11,893,745 $ (4,357,059) $ 7,536,686 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables summarize the Company's assets and liabilities measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015: September 30, 2016 Fair Value (Level 1) (Level 2) (Level 3) Common stock warrants $ 3,197 $ - $ - $ 3,197 Total $ 3,197 $ - $ - $ 3,197 December 31, 2015 Fair Value (Level 1) (Level 2) (Level 3) Common stock warrants $ 4,145 $ - $ - $ 4,145 Total $ 4,145 $ - $ - $ 4,145 |
Schedule Of Changes In Fair Value Derivative Liability | The Company estimated the fair value of the derivative liability using the Black-Scholes option pricing model. The fair value of the derivative liability as of September 30, 2016 was estimated using the following assumptions: Expected volatility 65 % Risk free rate 0.81 % Dividend yield 0 % Expected term (in years) 2.33 |
Schedule of Changes in Fair Value of Company's Level 3 Liabilities | The following sets forth a summary of changes in fair value of the Company’s Level 3 liabilities measured on a recurring basis for the nine months ended September 30, 2015 and September 30, 2016: Common Balance at December 31, 2014 $ 30,278 Fair value at issuance 41,305 Change in fair value (47,331) Balance at September 30, 2015 $ 24,252 Balance at December 31, 2015 $ 4,145 Change in fair value (948) Balance at September 30, 2016 $ 3,197 |
Borrowing Arrangements (Tables)
Borrowing Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes payable future debt payments | Future debt payments owed under the Fortress Agreement are as follows: Years ending December 31: 2016 $ 2,275,772 2017 6,931,526 Total $ 9,207,298 |
Schedule of warrant fair value assumptions | The Company estimated the fair value of the warrant to be $ 153,759 Expected volatility 60 % Risk free rate 1.62 % Dividend yield 0 % Expected term (in years) 5.00 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders Equity Note [Abstract] | |
Shares of common stock reserved for future issuance | Shares of common stock reserved for future issuance were as follows as of September 30, 2016: Series C convertible preferred stock 500,668 Series D convertible preferred stock 186,367 Series E convertible preferred stock 1,496,262 Options to purchase common stock 514,772 Shares reserved for issuances pursuant to 2014 Stock Plan 175,046 Warrants 4,615,849 Total 7,488,964 |
Redeemable Convertible preferred stock | Convertible preferred stock as of September 30, 2016 consisted of the following: Convertible Original Shares Shares Shares Liquidation Series A-1 $ 0.0100 5,000,000 5,000,000 0 $ - Series A-2 $ 1.6996 1,176,748 1,176,748 0 $ - Series B $ 1,000.00 2,750 2,750 0 $ - Series C $ 1,000.00 2,500 2,500 751 $ 751,000 Series D $ 1,000.00 1,500 369 369 $ 369,000 Series E $ 1,000.00 3,000 3,000 3,000 $ 3,000,000 Outstanding as of Sept. 30, 2015 Common Stock Issued Series A-1 212,466 141,262 Series A-2 161,355 28,518 Series B 1,102 420,956 |
Common stock warrants | Warrants Remaining Contractual Weighted Average 1,000,000 6.89 $ 2.005 1,271,826 4.81 $ 2.005 648,000 4.63 $ 2.01 158,416 4.62 $ 1.87 1,416,668 4.31 $ 1.79 50,000 5.41 $ 2.54 10,870 3.52 $ 4.60 5,762 3.52 $ 5.75 27,449 3.09 $ 20.00 23,858 2.33 $ 22.70 3,000 1.08 $ 26.60 4,615,849 5.05 $ 2.18 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Workers Compensation Discount [Abstract] | |
Summary of share-based compensation activity | Common stock option and restricted stock award activity under the Plan was as follows: Options and RSAs Outstanding Shares Available Number of Weighted Average Exercise Balance at December 31, 2015 71,431 369,887 $ 4.64 Authorized 250,000 Options forfeited 153,098 (153,098) $ 3.10 Options granted (305,000) 305,000 $ 1.41 Options expired 5,517 (7,017) $ 34.73 Balance at September 30, 2016 175,046 514,772 $ 2.77 Total vested and expected to vest shares (options) 514,772 $ 2.77 Total vested shares (options) 128,556 $ 5.79 |
Outstanding options | The following table summarizes information with respect to stock options outstanding at September 30, 2016: Options Outstanding Options Vested Exercise Shares Weighted- Weighted- Shares Weighted- $ 1.41 305,000 9.81 $ 1.41 - $ - $ 3.10 182,528 9.05 $ 3.10 101,312 $ 3.10 $ 5.60 2,500 0.58 $ 5.60 2,500 $ 5.60 $ 11.40 17,674 0.58 $ 11.40 17,674 $ 11.40 $ 30.40 7,070 0.58 $ 30.40 7,070 $ 30.40 514,772 9.05 $ 2.77 128,556 $ 5.79 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of employee stock options granted was estimated using the following weighted-average assumptions for the nine months ended September 30, 2016 and 2015: 2016 2015 Expected volatility 68 64 % Risk free rate 1.18 1.48 % Dividend yield 0 0 % Expected term (in years) 5.70 6.06 |
Schedule Of Stock Based Compensation Of Employees And Non Employees | Stock-based compensation for employees and non-employees related to options and RSAs recognized: For the three months ended Sept. 30 For the nine months ended Sept. 30 2016 2015 2016 2015 General and administrative $ 152,170 $ 246,485 $ 545,626 $ 843,386 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum annual lease payments | The future minimum payments related to this lease are as follows: Years ending December 31: 2016 29,394 2017 68,587 Total $ 97,981 |
Summary of Significant Accoun24
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | Oct. 12, 2016 | Jul. 25, 2016 | May 31, 2016 | Jan. 31, 2016 | Jun. 30, 2015 | Apr. 30, 2015 | Feb. 28, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Nov. 10, 2016 | Dec. 31, 2015 |
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Working Capital Net Amount | $ 11,616,970 | $ 11,616,970 | |||||||||||
Net Income (Loss) Attributable to Parent, Total | (2,795,081) | $ (3,470,867) | (5,254,652) | $ (9,495,347) | |||||||||
Retained Earnings (Accumulated Deficit), Total | (60,528,081) | (60,528,081) | $ (54,806,762) | ||||||||||
Future Unconditional Guarantee Paid | $ 2,200,000 | ||||||||||||
Contingent Fee Description | Litigation costs are based primarily on a contingent fee structure (expected to average less than 20% of license revenue for a portfolio) and as such do not scale significantly with the acquisition of new portfolios | ||||||||||||
Proceeds from Issuance of Common Stock | $ 1,200,000 | $ 1,835,000 | $ 1,182,278 | 1,835,000 | |||||||||
License and Services Revenue | $ 2,000,000 | ||||||||||||
Provision for Doubtful Accounts | 22,350 | ||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | 5,221,998 | 0 | |||||||||||
Proceeds from License Fees Received | 1,300,000 | ||||||||||||
Payments for Repurchase of Preferred Stock and Preference Stock | 2,500,000 | $ 0 | |||||||||||
Estimated During 2016 [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Debt Instrument, Face Amount | 7,400,000 | 7,400,000 | |||||||||||
Other Cost and Expense, Operating | 800,000 | ||||||||||||
Litigation Settlement, Expense | 1,500,000 | ||||||||||||
Estimated Capital Expenditure | 5,000,000 | ||||||||||||
Employee-related Liabilities, Current | 2,800,000 | 2,800,000 | |||||||||||
Series D Preferred Stock [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 250,000 | ||||||||||||
Series E Preferred Stock [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 3,000,000 | 2,800,000 | |||||||||||
Fortress Agreement [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Proceeds from Lines of Credit | $ 1,126,900 | ||||||||||||
Subsequent Event [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Proceeds from Issuance of Common Stock | $ 5,100,000 | ||||||||||||
Payments for Repurchase of Preferred Stock and Preference Stock | 1,300,000 | ||||||||||||
Subsequent Event [Member] | Series C Preferred Stock [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Payments for Repurchase of Redeemable Preferred Stock | $ 2,500,000 | ||||||||||||
Preferred Stock Shares Redemption Percentage | 70.00% | ||||||||||||
Subsequent Event [Member] | Fortress Agreement [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Cash | $ 2,357,850 | ||||||||||||
Patents [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Proceeds from Sale of Intangible Assets | $ 2,175,000 | $ 4,000,000 | |||||||||||
Finite-lived Intangible Assets Acquired | $ 12,109,118 | ||||||||||||
Patents [Member] | Estimated During 2016 [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Payments to Acquire Intangible Assets | 5,700,000 | ||||||||||||
Patents [Member] | Fixed Payments To Acquire Intangibles [Member] | Estimated During 2016 [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Payments to Acquire Intangible Assets | 2,200,000 | ||||||||||||
Patents [Member] | Variable Payments To Acquire Intangibles [Member] | Estimated During 2016 [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Payments to Acquire Intangible Assets | $ 3,500,000 | ||||||||||||
Minimum [Member] | Patents [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Property plant and equipments estimated useful lives of assets | 7 years | ||||||||||||
Maximum [Member] | Patents [Member] | |||||||||||||
Summary of Significant Accounting Policies [Line Items] | |||||||||||||
Property plant and equipments estimated useful lives of assets | 10 years |
Patents - Additional Informatio
Patents - Additional Information (Detail) | Sep. 30, 2016USD ($) |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | $ 1,510,977 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 1,510,977 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 1,510,977 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 1,510,977 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | $ 1,481,270 |
Patents (Detail)
Patents (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Gross Carrying Amount | $ 11,893,745 | |
Accumulated Amortization | (4,357,059) | |
Net Carrying Amount | $ 7,536,686 | $ 8,669,921 |
Patents [Member] | ||
Weighted Average Useful Life | 6 years 1 month 24 days | |
Gross Carrying Amount | $ 11,893,745 | |
Accumulated Amortization | (4,357,059) | |
Net Carrying Amount | $ 7,536,686 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Sep. 30, 2016 | Jan. 21, 2016 | Jan. 31, 2014 |
Fair Value Disclosure [Line Items] | |||
Purchase of warrants to common stock | $ 23,858 | ||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.005 | $ 1.79 | $ 30.40 |
Adjusted Exercise Price Of Warrants | $ 22.70 |
Fair Value Measurements (Detail
Fair Value Measurements (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | $ 3,197 | $ 4,145 |
Common stock warrants [Member] | ||
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | 3,197 | 4,145 |
Fair Value, Inputs, Level 1 [Member] | ||
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | Common stock warrants [Member] | ||
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Common stock warrants [Member] | ||
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | 3,197 | 4,145 |
Fair Value, Inputs, Level 3 [Member] | Common stock warrants [Member] | ||
Liabilities Measured on Recurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure, Total | $ 3,197 | $ 4,145 |
Fair Value Measurements (Deta29
Fair Value Measurements (Detail 1) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Of Derivative Liability [Line Items] | |
Expected volatility | 65.00% |
Risk free rate | 0.81% |
Dividend yield | 0.00% |
Expected term (in years) | 2 years 3 months 29 days |
Fair Value Measurements (Deta30
Fair Value Measurements (Detail 2) - Common stock warrants [Member] - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value Disclosure [Line Items] | ||
Balance beginning | $ 4,145 | $ 30,278 |
Fair value at issuance | 41,305 | |
Change in fair value | (948) | (47,331) |
Balance ending | $ 3,197 | $ 24,252 |
Borrowing Arrangements - Additi
Borrowing Arrangements - Additional Information (Detail) - USD ($) | Oct. 01, 2014 | Jun. 30, 2016 | Mar. 31, 2016 | Jun. 26, 2015 | Sep. 23, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jan. 21, 2016 | Nov. 30, 2015 | Jan. 31, 2014 |
Borrowing Arrangements [Line Items] | |||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.005 | $ 1.79 | $ 30.40 | ||||||||
Proceeds from (Repayments of) Related Party Debt | $ (50,000) | $ (80,000) | |||||||||
Payments for Fees | $ 385,000 | ||||||||||
Stock Issued During Period, Shares, New Issues | 467,392 | ||||||||||
Repayments of Senior Debt | 1,640,016 | $ 2,147,000 | |||||||||
Cash Reserve Deposit Required and Made | $ 1,000,000 | ||||||||||
National Securities Corporation [Member] | |||||||||||
Borrowing Arrangements [Line Items] | |||||||||||
Share Price | $ 20 | ||||||||||
Debt Instrument, Fee Amount | $ 330,000 | ||||||||||
Stock Issued During Period, Shares, New Issues | 24,750 | ||||||||||
Fair Value Adjustment of Warrants | $ 153,759 | ||||||||||
Warrant [Member] | |||||||||||
Borrowing Arrangements [Line Items] | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted | 1,000,000 | ||||||||||
Fortress Agreement [Member] | |||||||||||
Borrowing Arrangements [Line Items] | |||||||||||
Proceeds from Issuance of Senior Long-term Debt | 11,137,753 | ||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.54 | ||||||||||
Share Price | $ 11.40 | ||||||||||
Termination Fee Payable | $ 853,965 | ||||||||||
Gross Proceeds From Senior Long Term Debt | 12,199,500 | ||||||||||
Contract Claims Description | the Company is required to apply, towards its obligations pursuant to the Fortress Notes, 100% of the difference between (a) any revenues generated from the Monetization Revenue less (b) any litigation or licensing related third party expenses (including fees paid to the original patent owners) reasonably incurred by the Company to earn Monetization Revenue, subject to certain limits (such difference defined as Monetization Net Revenues). | ||||||||||
Revenue Recognition Under Agreement Description | the Company granted to the purchasers identified in the Fortress Agreement (the Revenue Participants) a right to receive a portion of the Companys Monetization Revenues totaling $11,284,538 (the Revenue Stream). | ||||||||||
Revenue Recognition of Participants Under Proportionate Share Agreement Description | The Revenue Participants proportionate share is equal to 75% of Monetization Net Revenues until $5,000,000 has been paid to the Revenue Participants, then 50% of Monetization Net Revenues until the remaining $6,284,538 has been paid to the Revenue Participants. All Revenue Stream Payments will be payable on a monthly basis in arrears. The rights of the Revenue Participants to the Revenue Stream are secured by all of the Companys current patent assets and the Cash Collateral Account, in each case junior in priority to the rights of the Note Purchasers. In connection with the Revenue Participants right to receive a portion of the Companys Monetization Revenues, the Company has recorded a net liability of $3,948,153, which represents the amount of the expected Monetization Revenues, discounted 18% over the expected life of the revenue share agreement. In conjunction with an amendment to the Amended Fortress Agreement dated March 1, 2016, the Company determined that the change in expected cash flows was greater than 10% as compared to the previous agreement and, therefore, a debt extinguishment was deemed to have occurred. When recording the new present value of the debt and revenue share, which was computed using a discount rate of 18%, a gain on debt extinguishment of $2,434,661 was recognized | ||||||||||
Warrants To Purchase Common Stock | 50,000 | ||||||||||
Debt Related Commitment Fees and Debt Issuance Costs | $ 476,868 | ||||||||||
Revenue Recognition Of Revenue Sharing Under Proportionate Share Agreement Description | Under the terms of the LOI, net monetization revenues from this program would be shared with Fortress to receive 70% and the Company to receive 30% of revenues (the Revenue Sharing), with such Revenue Sharing to be effectuated following reimbursement to Fortress for monetization expenses and the sum of $30.5 million. The Company and Fortress are working to finalize this new definitive agreement, which they aim to complete by November 21, 2016. | ||||||||||
Reimbursement Revenue | $ 30,500,000 | ||||||||||
Fortress Agreement [Member] | Common Stock [Member] | |||||||||||
Borrowing Arrangements [Line Items] | |||||||||||
Share Price | $ 20 | ||||||||||
Stock Issued During Period, Shares, New Issues | 50,000 | ||||||||||
Stock Issued During Period, Value, New Issues | $ 1,000,000 | ||||||||||
Chief Executive Officer [Member] | Share Purchase Agreement [Member] | |||||||||||
Borrowing Arrangements [Line Items] | |||||||||||
Due to Related Parties | $ 150,000 | ||||||||||
Repayments of Related Party Debt | $ 50,000 | ||||||||||
Joseph W. Beyers [Member] | Share Purchase Agreement [Member] | |||||||||||
Borrowing Arrangements [Line Items] | |||||||||||
Share Price | $ 4.60 | $ 21.40 | $ 4.60 | ||||||||
Stock Issued During Period, Shares, Other | 23,364 | ||||||||||
Stock Issued During Period, Value, Other | $ 500,000 | $ 6,000,000 | |||||||||
Proceeds from (Repayments of) Related Party Debt | 300,000 | ||||||||||
Due to Related Parties | $ 300,000 | ||||||||||
Proceeds from Issuance or Sale of Equity | $ 100,000 | ||||||||||
Stock Issued During Period, Shares, New Issues | 21,740 | ||||||||||
Fortress Notes [Member] | |||||||||||
Borrowing Arrangements [Line Items] | |||||||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR plus 7%. In addition, a 3% per annum paid-in-kind (PIK) interest will be paid by increasing the principal amount of the Fortress Notes by the amount of such interest. The PIK interest shall be treated as principal of the Fortress Notes for all purposes of interest accrual or calculation of any premium payment. In connection with the execution of the Fortress Agreement, on October 1, 2014, the Company paid to the Note Purchasers a structuring fee equal to $385,000. This was accounted for as a discount on notes payable. | ||||||||||
Repayments of Senior Debt | $ 3,787,016 |
Borrowing Arrangements (Detail)
Borrowing Arrangements (Detail) | Sep. 30, 2016USD ($) |
Borrowing Arrangements [Line Items] | |
2,016 | $ 2,275,772 |
2,017 | 6,931,526 |
Total | $ 9,207,298 |
Borrowing Arrangements (Detail
Borrowing Arrangements (Detail 1) - Warrant [Member] | 1 Months Ended |
Nov. 01, 2014 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Expected volatility | 60.00% |
Risk free rate | 1.62% |
Dividend yield | 0.00% |
Expected term (in years) | 5 years |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | May 13, 2016USD ($)$ / sharesshares | Jul. 31, 2016 | Jul. 21, 2016USD ($)$ / sharesshares | May 31, 2016USD ($) | May 16, 2016USD ($)$ / sharesshares | Mar. 31, 2016$ / sharesshares | Jan. 21, 2016USD ($)$ / sharesshares | Apr. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Nov. 01, 2014USD ($)$ / sharesshares | Jan. 31, 2014USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Nov. 30, 2015$ / shares |
Class of Stock [Line Items] | |||||||||||||||
Common Stock, Shares Authorized | shares | 100,000,000 | 100,000,000 | |||||||||||||
Preferred Stock, Shares Authorized | shares | 10,000,000 | 10,000,000 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 1,416,668 | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.79 | $ 30.40 | $ 2.005 | ||||||||||||
Sale of Stock, Price Per Share | $ 4.60 | ||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||||||||||||
Proceeds from Issuance of Common Stock | $ | $ 1,200,000 | $ 1,835,000 | $ 1,182,278 | $ 1,835,000 | |||||||||||
Stock Issued During Period, Shares, New Issues | shares | 467,392 | ||||||||||||||
Cash Paid To Holder For Waiver | $ | $ 35,000 | ||||||||||||||
Preferred Stock, Redemption Terms | (i) on or prior to August 11, 2016, in an amount equal to 120% of the aggregate stated value then outstanding, and (ii) after August 11, 2016, in an amount equal to 135% of the aggregate stated value then outstanding. | (i) on or prior to March 26, 2016, in an amount equal to 126% of the aggregate stated value then outstanding, (ii) after March 26, 2016 and on or prior to July 26, 2016, in an amount equal to 144% of the aggregate stated value then outstanding and (iii) after July 26, 2016, in an amount equal to 150% of the aggregate stated value then outstanding. | |||||||||||||
Percentage of Investors Subscription Amount | 85.00% | ||||||||||||||
Convertible Preferred Stock, Terms of Conversion | (a) the conversion price then in effect or (b) 65% of the volume weighted average price of the Companys common stock for ten consecutive days prior to the applicable conversion date. | ||||||||||||||
Commission Of Placement Agent, Percentage | 10.00% | ||||||||||||||
Commission Of Placement Agent, Value | $ | $ 250,000 | ||||||||||||||
Preferred Stock Dividends, Income Statement Impact | $ | 466,667 | ||||||||||||||
Series E Warrant [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Conversion Price Per Share | $ 2.005 | ||||||||||||||
Percentage of Investors Subscription Amount | 85.00% | ||||||||||||||
Purchase Agreement 2016 [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.005 | ||||||||||||||
Percentage of Common Stock purchased By Each Purchaser | 100.00% | ||||||||||||||
Series D Purchase Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 369 | ||||||||||||||
Proceeds from Contributions from Affiliates | $ | $ 144,000 | ||||||||||||||
Ladenburg Thalmann Co. Inc [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 5,762 | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.75 | ||||||||||||||
Cash Paid To Placement Agent | $ | $ 106,000 | ||||||||||||||
Additional Cash paid to Placement Agent | $ | $ 50,000 | ||||||||||||||
Additional Class Of Warrant Or Right Issued | shares | 10,870 | ||||||||||||||
Investor [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Legal Fees | $ | $ 25,000 | $ 50,000 | |||||||||||||
Chardan Capital Markets [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Cash Paid To Placement Agent | $ | $ 116,932 | ||||||||||||||
Fortress Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.54 | ||||||||||||||
Purchase Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Sale of Stock, Price Per Share | $ 2.005 | ||||||||||||||
Proceeds from Issuance of Common Stock | $ | $ 1,300,000 | $ 2,150,000 | |||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 648,000 | ||||||||||||||
Warrant [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares | 23,858 | ||||||||||||||
Fair Value Adjustment of Warrants | $ | $ 164,196 | $ 348,963 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 20.70 | $ 30.40 | |||||||||||||
Warrants To Purchase Shares Of Common Stock | shares | 27,750 | ||||||||||||||
Warrant [Member] | Fortress Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 22.70 | ||||||||||||||
Common Stock [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Conversion Price Per Share | $ 1.50 | ||||||||||||||
Series C Preferred Stock [Member] | Private Placement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | ||||||||||||||
Conversion of Stock, Shares Converted | shares | 1,666,668 | ||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 2,500 | ||||||||||||||
Conversion Price Per Share | $ 1.50 | ||||||||||||||
Stock Issued During Period, Value, New Issues | $ | $ 2,500,000 | ||||||||||||||
Series D Preferred Stock [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1.87 | ||||||||||||||
Preferred stock, Convertible, Conversion Price | 1.98 | ||||||||||||||
Percentage of Investors subscription amount Called by Warrants or Rights | 85.00% | ||||||||||||||
Series D Preferred Stock [Member] | Purchase Agreement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Proceeds from Issuance of Convertible Preferred Stock | $ | $ 369,000 | ||||||||||||||
Sale of Stock, Price Per Share | $ 1,000 | ||||||||||||||
Series E Preferred Stock [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred Stock, Par or Stated Value Per Share | $ 1,000 | ||||||||||||||
Conversion of Stock, Shares Converted | shares | 1,496,262 | ||||||||||||||
Conversion Price Per Share | $ 2.005 | ||||||||||||||
Stock Issued During Period, Value, New Issues | $ | $ 3,000,000 | ||||||||||||||
Preferred Stock, Redemption Terms | The Series E Preferred Stock contains provisions providing for an adjustment in the conversion price upon the occurrence of certain events, including stock splits, stock dividends, and fundamental transactions. However, in no event may the conversion price be lower than $0.25 per share. The Company may redeem some or all of the Series E Preferred Stock for cash as follows: (i) on or prior to September 25, 2016, in an amount equal to 126% of the aggregate stated value then outstanding, (ii) after September 25, 2016 and on or prior to January 25, 2017, in an amount equal to 144% of the aggregate stated value then outstanding and (iii) after January 25, 2017, in an amount equal to 150% of the aggregate stated value then outstanding. | ||||||||||||||
Convertible Preferred Stock, Terms of Conversion | (a) the conversion price then in effect or (b) 65% of the volume weighted average price of the Companys common stock for ten consecutive days prior to the applicable conversion date. | ||||||||||||||
Conversion of Stock, Description | common stock for the issuance of the number of shares of common stock issuable upon the conversion of the Series E Preferred Stock in excess of 19.99% of the outstanding common stock (the Shareholder Approval). Until the Company obtains the Shareholder Approval, the conversion of the Series E Preferred Stock is limited to 19.99% of the currently outstanding common stock. Additionally, until the Series E Preferred Stock is no longer outstanding, the Investors may participate in future offerings for up to 50% of the amount of such offerings. | ||||||||||||||
Series E Preferred Stock [Member] | Private Placement [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Stock Issued During Period, Shares, New Issues | shares | 3,000 | ||||||||||||||
Maximum [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Common Stock, Shares Authorized | shares | 110,000,000 | ||||||||||||||
Minimum [Member] | Series C Preferred Stock [Member] | |||||||||||||||
Class of Stock [Line Items] | |||||||||||||||
Preferred Stock Redemption Price Percentage | 162.00% |
Stockholders' Equity (Detail)
Stockholders' Equity (Detail) | Sep. 30, 2016shares |
Shares Of Common Stock Reserved For Future Issuance [Line Items] | |
Options to purchase common stock | 514,772 |
Shares reserved for issuance | 7,488,964 |
Warrants | |
Shares Of Common Stock Reserved For Future Issuance [Line Items] | |
Shares reserved for issuance | 4,615,849 |
2014 Stock Plan | |
Shares Of Common Stock Reserved For Future Issuance [Line Items] | |
Shares reserved for issuance | 175,046 |
Series C Convertible Preferred Stock [Member] | |
Shares Of Common Stock Reserved For Future Issuance [Line Items] | |
Convertible preferred stock | 500,668 |
Series D Convertible Preferred Stock [Member] | |
Shares Of Common Stock Reserved For Future Issuance [Line Items] | |
Convertible preferred stock | 186,367 |
Series E Convertible Preferred Stock [Member] | |
Shares Of Common Stock Reserved For Future Issuance [Line Items] | |
Convertible preferred stock | 1,496,262 |
Stockholders' Equity (Detail 1)
Stockholders' Equity (Detail 1) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Redeemable Convertible Preferred Stock Series A-1 [Member] | ||
Temporary Equity [Line Items] | ||
Original Issue Price | $ 0.01 | |
Shares Designated | 5,000,000 | |
Shares Originally Issued | 5,000,000 | |
Shares Outstanding | 0 | |
Liquidation Preference | $ 0 | |
Redeemable Convertible Preferred Stock Series A-2 [Member] | ||
Temporary Equity [Line Items] | ||
Original Issue Price | $ 1.6996 | |
Shares Designated | 1,176,748 | |
Shares Originally Issued | 1,176,748 | |
Shares Outstanding | 0 | |
Liquidation Preference | $ 0 | |
Series B Convertible Preferred Share [Member] | ||
Temporary Equity [Line Items] | ||
Original Issue Price | $ 1,000 | |
Shares Designated | 2,750 | |
Shares Originally Issued | 2,750 | |
Shares Outstanding | 0 | |
Liquidation Preference | $ 0 | |
Series C Convertible Preferred Stock [Member] | ||
Temporary Equity [Line Items] | ||
Original Issue Price | $ 1,000 | |
Shares Designated | 2,500 | |
Shares Originally Issued | 2,500 | |
Shares Outstanding | 751 | |
Liquidation Preference | $ 751,000 | $ 0 |
Series D Convertible Preferred Stock [Member] | ||
Temporary Equity [Line Items] | ||
Original Issue Price | $ 1,000 | |
Shares Designated | 1,500 | |
Shares Originally Issued | 369 | |
Shares Outstanding | 369 | |
Liquidation Preference | $ 369,000 | 0 |
Series E Convertible Preferred Stock [Member] | ||
Temporary Equity [Line Items] | ||
Original Issue Price | $ 1,000 | |
Shares Designated | 3,000 | |
Shares Originally Issued | 3,000 | |
Shares Outstanding | 3,000 | |
Liquidation Preference | $ 3,000,000 | $ 0 |
Stockholders' Equity (Detail 2)
Stockholders' Equity (Detail 2) - shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Redeemable Convertible Preferred Stock Series A One [Member] | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 212,466 | |
Redeemable Convertible Preferred Stock Series A Two [Member] | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 161,355 | |
Series B Convertible Preferred Share [Member] | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 1,102 | |
Common Stock Series A One [Member] | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 141,262 | |
Common Stock Series A Two [Member] | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 28,518 | |
Common Stock Series B [Member] | ||
Stock Issued During Period, Shares, Conversion of Convertible Securities | 420,956 |
Stockholders' Equity (Detail 3)
Stockholders' Equity (Detail 3) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 4,615,849 |
Remaining Contractual Life (years) | 5 years 18 days |
Weighted Average Exercise | $ / shares | $ 2.18 |
Warrant One [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 1,000,000 |
Remaining Contractual Life (years) | 6 years 10 months 20 days |
Weighted Average Exercise | $ / shares | $ 2.005 |
Warrant Two [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 1,271,826 |
Remaining Contractual Life (years) | 4 years 9 months 22 days |
Weighted Average Exercise | $ / shares | $ 2.005 |
Warrant Three [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 648,000 |
Remaining Contractual Life (years) | 4 years 7 months 17 days |
Weighted Average Exercise | $ / shares | $ 2.01 |
Warrant Four [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 158,416 |
Remaining Contractual Life (years) | 4 years 7 months 13 days |
Weighted Average Exercise | $ / shares | $ 1.87 |
Warrant Five [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 1,416,668 |
Remaining Contractual Life (years) | 4 years 3 months 22 days |
Weighted Average Exercise | $ / shares | $ 1.79 |
Warrant Six [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 50,000 |
Remaining Contractual Life (years) | 5 years 4 months 28 days |
Weighted Average Exercise | $ / shares | $ 2.54 |
Warrant Seven [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 10,870 |
Remaining Contractual Life (years) | 3 years 6 months 7 days |
Weighted Average Exercise | $ / shares | $ 4.60 |
Warrant Eight [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 5,762 |
Remaining Contractual Life (years) | 3 years 6 months 7 days |
Weighted Average Exercise | $ / shares | $ 5.75 |
Warrent Nine [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 27,449 |
Remaining Contractual Life (years) | 3 years 1 month 2 days |
Weighted Average Exercise | $ / shares | $ 20 |
Warrent Ten [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 23,858 |
Remaining Contractual Life (years) | 2 years 3 months 29 days |
Weighted Average Exercise | $ / shares | $ 22.70 |
Warrent Eleven [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Warrants Outstanding | shares | 3,000 |
Remaining Contractual Life (years) | 1 year 29 days |
Weighted Average Exercise | $ / shares | $ 26.60 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Oct. 16, 2015 | Sep. 30, 2015 | Mar. 25, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Nov. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock, capital shares reserved for future issuance | 7,488,964 | 7,488,964 | ||||||
Share Based Compensation Arrangements By Share Based Payment Award Options Assumed In Merger Weighted Average Exercise Price | $ 143 | |||||||
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Assumed In Merger | 1,500 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 1,413,904 | |||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit | $ 6.90 | $ 20.50 | ||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit | $ 38.50 | $ 38.50 | ||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 9 years 18 days | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Description and Terms | The exercise price of an option cannot be less than the fair value of one share of common stock on the date of grant for incentive stock options or non-statutory stock options. The exercise price of an incentive stock option cannot be less than 110% of the fair value of one share of common stock on the date of grant for stockholders owning more than 10% of all classes of stock. Options are exercisable over periods not to exceed ten years (or five years for incentive stock options granted to holders of 10% or more of the voting stock) from the grant date. Options may be granted with vesting terms as determined by the Board of Directors which generally include a one to five-year period or performance conditions or both. The pre-existing options were subsumed under the Plan. | |||||||
Restricted Stock [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based compensation arrangement by share-based payment award, options, forfeitures in period | 153,098 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 24,400 | $ 24,400 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 148,144 | |||||||
Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 4 years | |||||||
Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | |||||||
2013 Stock Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 1 year 9 months 14 days | |||||||
Non-employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 77,672 | $ 41,381 | $ 297,693 | $ 258,053 | ||||
Non employee service share based compensation nonvested awards total compensation cost not yet recognized period for recognition1 | $ 635,906 | |||||||
2013 Stock Plan [Member] | Board of Directors [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Common stock, capital shares reserved for future issuance | 360,545 | |||||||
2014 Stock Plan [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 177,446 | 143,266 | ||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 10 years | 10 years | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ 250,000 | |||||||
Share Based Compensation Arrangement By Share Based Payment Award Shares Available For Grant Addition to Twenty Fifteen Stock Plan In Period | 170,000 | |||||||
Stock option one [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 142,063 | 126,985 | ||||||
Stock option one [Member] | Maximum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 3 years 1 month 6 days | |||||||
Stock option one [Member] | Minimum [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Outstanding Options, Weighted Average Remaining Contractual Term | 2 years 1 month 6 days | |||||||
Stock Option Two [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Percentage for closing price of common stock | 48.00% | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 35,383 | 16,282 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period, Weighted Average Exercise Price | $ 3.10 | $ 11.40 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Detail) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted Average Exercise Price Per share, End of year | $ / shares | $ 2.77 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares Available for Grant, Beginning of year | 71,431 |
Shares Available For Grant, Authorized | 250,000 |
Shares Available For Grant, Options Forfeited | 153,098 |
Shares Available For Grant, Options Granted | (305,000) |
Shares Available For Grant, Options Expired | 5,517 |
Shares Available for Grant, End of year | 175,046 |
Number of Shares, Beginning of Year | 369,887 |
Number Of Shares, Options Forfeited | (153,098) |
Number of Shares, Options Granted | 305,000 |
Number Of Shares, Options Expired | (7,017) |
Number of Shares, End of Year | 514,772 |
Number of Shares, Total vested and expected to vest shares (options) | 514,772 |
Number of Shares, Total vested shares (options) | 128,556 |
Weighted Average Exercise Price Per share, Beginning of year | $ / shares | $ 4.64 |
Weighted Average Exercise Price Per Share, Options Forfeited | $ / shares | 3.1 |
Weighted Average Exercise Price Per Share, Options Granted | $ / shares | 1.41 |
Weighted Average Exercise Price Per Share, Options Expired | $ / shares | 34.73 |
Weighted Average Exercise Price Per share, End of year | $ / shares | 2.77 |
Weighted Average Exercise Price Per Share, Total vested and expected to vest shares (options) | $ / shares | 2.77 |
Weighted Average Exercise Price Per Share, Total vested shares (options) | $ / shares | $ 5.79 |
Stock-Based Compensation (Det41
Stock-Based Compensation (Detail 1) - $ / shares | 9 Months Ended | ||
Sep. 30, 2016 | Jan. 21, 2016 | Jan. 31, 2014 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price Per Share | $ 2.005 | $ 1.79 | $ 30.40 |
Outstanding Options, Shares | 514,772 | ||
Outstanding Options, Weighted- Average Remaining Contractual Life (Years) | 9 years 18 days | ||
Weighted - Average Exercise Price (in dollars per share) | $ 2.77 | ||
Exercisable Options, Shares | 128,556 | ||
Exercisable Options, Weighted- Average Exercise Price Per Share (in dollars per share) | $ 5.79 | ||
Range of Exercise Prices - Range 1 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price Per Share | $ 1.41 | ||
Outstanding Options, Shares | 305,000 | ||
Outstanding Options, Weighted- Average Remaining Contractual Life (Years) | 9 years 9 months 22 days | ||
Weighted - Average Exercise Price (in dollars per share) | $ 1.41 | ||
Exercisable Options, Shares | 0 | ||
Exercisable Options, Weighted- Average Exercise Price Per Share (in dollars per share) | $ 0 | ||
Range of Exercise Prices - Range 2 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price Per Share | $ 3.10 | ||
Outstanding Options, Shares | 182,528 | ||
Outstanding Options, Weighted- Average Remaining Contractual Life (Years) | 9 years 18 days | ||
Weighted - Average Exercise Price (in dollars per share) | $ 3.10 | ||
Exercisable Options, Shares | 101,312 | ||
Exercisable Options, Weighted- Average Exercise Price Per Share (in dollars per share) | $ 3.10 | ||
Range of Exercise Prices - Range 3 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price Per Share | $ 5.60 | ||
Outstanding Options, Shares | 2,500 | ||
Outstanding Options, Weighted- Average Remaining Contractual Life (Years) | 6 months 29 days | ||
Weighted - Average Exercise Price (in dollars per share) | $ 5.60 | ||
Exercisable Options, Shares | 2,500 | ||
Exercisable Options, Weighted- Average Exercise Price Per Share (in dollars per share) | $ 5.60 | ||
Range of Exercise Prices - Range 4 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price Per Share | $ 11.40 | ||
Outstanding Options, Shares | 17,674 | ||
Outstanding Options, Weighted- Average Remaining Contractual Life (Years) | 6 months 29 days | ||
Weighted - Average Exercise Price (in dollars per share) | $ 11.40 | ||
Exercisable Options, Shares | 17,674 | ||
Exercisable Options, Weighted- Average Exercise Price Per Share (in dollars per share) | $ 11.40 | ||
Range of Exercise Prices - Range 5 [Member] | |||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||
Exercise Price Per Share | $ 30.40 | ||
Outstanding Options, Shares | 7,070 | ||
Outstanding Options, Weighted- Average Remaining Contractual Life (Years) | 6 months 29 days | ||
Weighted - Average Exercise Price (in dollars per share) | $ 30.40 | ||
Exercisable Options, Shares | 7,070 | ||
Exercisable Options, Weighted- Average Exercise Price Per Share (in dollars per share) | $ 30.40 |
Stock-Based Compensation (Det42
Stock-Based Compensation (Detail 2) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 68.00% | 64.00% |
Risk free rate | 1.18% | 1.48% |
Dividend yield | 0.00% | 0.00% |
Expected term (in years) | 5 years 8 months 12 days | 6 years 22 days |
Stock-Based Compensation (Det43
Stock-Based Compensation (Detail 3) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating expenses | ||||
General and administrative | $ 152,170 | $ 246,485 | $ 545,626 | $ 843,386 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2014 | |
Income Tax [Line Items] | |||
Operating Loss Carryforwards | $ 48.8 | $ 11.3 | |
Operating Loss Carryforwards Expiration Description | expiring beginning in 2021 for federal and 2015 for California. | ||
Deferred Tax Assets Net Operating Income Loss Carry Forwards | $ 30.4 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jul. 31, 2016 | Jan. 31, 2016 | Mar. 31, 2014 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 01, 2015 | |
Commitments and Contingencies [Line Items] | ||||||||||
Security Deposit | $ 18,993 | |||||||||
Operating Leases, Rent Expense | $ 27,152 | $ 27,152 | $ 81,454 | $ 81,454 | ||||||
Future unconditional guarantee paid | 2,200,000 | |||||||||
Guaranteed Benefit Liability Future Minimum Payments Due Current | $ 2,200,000 | 2,200,000 | ||||||||
Patents [Member] | Guarantee Agreement One [Member] | ||||||||||
Commitments and Contingencies [Line Items] | ||||||||||
Future unconditional guarantee paid | $ 18,000,000 | |||||||||
Discount Rate | 12.00% | |||||||||
Payments On Guaranteed Accrued Interest | $ 1,000,000 | |||||||||
Payments On Deferred Expenses | 16,300,000 | |||||||||
Payments On Guaranteed Payment Liability | $ 16,300,000 | |||||||||
Patents [Member] | Guarantee Agreement Two [Member] | ||||||||||
Commitments and Contingencies [Line Items] | ||||||||||
Guaranteed Benefit Liability, Net | $ 2,000,000 | |||||||||
Patents [Member] | Guarantee Agreement Two [Member] | January 31, 2016 [Member] | ||||||||||
Commitments and Contingencies [Line Items] | ||||||||||
Payments On Guaranteed Payment Liability | $ 550,000 | |||||||||
Patents [Member] | Guarantee Agreement Two [Member] | July 1, 2016 [Member] | ||||||||||
Commitments and Contingencies [Line Items] | ||||||||||
Payments On Guaranteed Accrued Interest | $ 95,000 | |||||||||
Payments On Guaranteed Payment Liability | $ 1,650,000 | |||||||||
Minimum [Member] | ||||||||||
Commitments and Contingencies [Line Items] | ||||||||||
Operating lease rent | $ 9,200 | |||||||||
Maximum [Member] | ||||||||||
Commitments and Contingencies [Line Items] | ||||||||||
Operating lease rent | $ 9,800 |
Commitments and Contingencies46
Commitments and Contingencies (Detail) | Sep. 30, 2016USD ($) |
Commitments and Contingencies [Line Items] | |
2,016 | $ 29,394 |
2,017 | 68,587 |
Total | $ 97,981 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - USD ($) | Oct. 12, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Nov. 14, 2016 | Jan. 21, 2016 | Nov. 30, 2015 | Jan. 31, 2014 |
Subsequent Event [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,416,668 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.005 | $ 1.79 | $ 30.40 | ||||
Payments for Repurchase of Preferred Stock and Preference Stock | $ 2,500,000 | $ 0 | |||||
Fortress Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 2.54 | ||||||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 6,000,000 | ||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 1 | ||||||
Proceeds from Issuance or Sale of Equity | $ 6,000,000 | ||||||
Sale of Stock, Number of Shares Issued in Transaction | 6,000,000 | ||||||
Shares Issued, Price Per Share | $ 1 | ||||||
Payments for Repurchase of Preferred Stock and Preference Stock | $ 1,300,000 | ||||||
Payments for Operating Activities | $ 3,800,000 | ||||||
Percentage Of Increase In Preferred Stock Redemption Premium | 15.00% | ||||||
Proceeds from Issuance Initial Public Offering | $ 5,100,000 | ||||||
Subsequent Event | July 2016 Warrants [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Reduction In Exercise Price Of Warrants | $ 1.43 | ||||||
Subsequent Event | May 2016 Warrants [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Reduction In Exercise Price Of Warrants | $ 1.86 | ||||||
Subsequent Event | Fortress Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Minimum Cash Balance Required To Maintain | $ 1,000,000 |