Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Riot Blockchain, Inc. | |
Entity Central Index Key | 0001167419 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 24,731,215 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity Incorporation State Country Code | NV | |
Entity File Number | 001-33675 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 15,162,781 | $ 225,390 |
Prepaid expenses and other current assets | 2,004,237 | 1,378,534 |
Digital currencies | 3,157,218 | 706,625 |
Total current assets | 20,324,236 | 2,310,549 |
Property and equipment, net | 127,581 | 26,269 |
Right of use assets | 937,395 | |
Intangible rights acquired | 700,167 | 700,167 |
Long-term investments | 9,723,100 | 9,412,726 |
Security deposits | 703,275 | 703,275 |
Patents, net | 469,548 | 507,342 |
Convertible note and accrued interest | 200,000 | |
Total assets | 32,985,302 | 13,860,328 |
Current liabilities | ||
Accounts payable | 815,713 | 3,829,315 |
Accrued expenses | 1,984,775 | 1,516,252 |
Deferred purchase price - BMSS | 1,200,000 | |
Operating lease liability, current | 890,904 | |
Deferred revenue, current portion | 96,698 | 96,698 |
Current liabilities of discontinued operations | 16,340 | 16,340 |
Total current liabilities | 3,804,430 | 6,658,605 |
Notes payable | 1,696,083 | |
Operating lease liability, less current portion | 47,644 | |
Deferred revenue, less current portion | 799,396 | 871,919 |
Deferred income tax liability | 142,709 | 142,709 |
Total liabilities | 4,794,179 | 9,369,316 |
Commitments and contingencies - Note 14 | ||
Stockholders' equity | ||
Common stock, no par value; 170,000,000 shares authorized; 24,206,395 and 14,519,058 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 241,974,307 | 202,917,443 |
Accumulated deficit | (213,840,661) | (197,199,197) |
Total Riot Blockchain stockholders' equity | 28,155,952 | 5,787,305 |
Non-controlling interest | 35,171 | (1,296,293) |
Total stockholders' equity | 28,191,123 | 4,491,012 |
Total liabilities and stockholders' equity | 32,985,302 | 13,860,328 |
2% Convertible Preferred Stock Series A [Member] | ||
Stockholders' equity | ||
Preferred stock, no par value | ||
0% Convertible Preferred Stock Series B [Member] | ||
Stockholders' equity | ||
Preferred stock, no par value | $ 22,306 | $ 69,059 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock, par value | ||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Common stock, par value | ||
Common stock, shares authorized | 170,000,000 | 170,000,000 |
Common stock, shares issued | 24,206,395 | 14,519,058 |
Common stock, shares outstanding | 24,206,395 | 14,519,058 |
2% Convertible Preferred Stock Series A [Member] | ||
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
0% Convertible Preferred Stock Series B [Member] | ||
Preferred stock, shares authorized | 1,750,001 | 1,750,001 |
Preferred stock, shares issued | 4,199 | 13,000 |
Preferred stock, shares outstanding | 4,199 | 13,000 |
Condensed Interim Consolidated
Condensed Interim Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue: | ||||
Total Revenue | $ 1,739,165 | $ 2,366,683 | $ 5,636,475 | $ 6,159,929 |
Costs and expenses: | ||||
Cost of revenues (exclusive of depreciation and amortization shown below) | 1,476,135 | 2,031,885 | 4,535,456 | 3,933,381 |
Selling, general and administrative | 1,762,021 | 5,970,411 | 7,139,658 | 16,314,023 |
Depreciation and amortization | 23,414 | 658,338 | 70,482 | 5,685,664 |
Impairment of property and equipment | 26,858,023 | |||
Impairment of digital currencies | 372,124 | 163,837 | 372,124 | 3,374,976 |
Total costs and expenses | 3,633,694 | 8,824,471 | 12,117,720 | 56,166,067 |
Operating loss from continuing operations | (1,894,529) | (6,457,788) | (6,481,245) | (50,006,138) |
Other income (expense): | ||||
Loss on issuance of convertible notes, common stock and warrants | (6,154,660) | |||
Change in fair value of warrant liability | (2,869,726) | |||
Change in fair value of convertible notes | (3,895,233) | |||
Gain on deconsolidation of Tess | 1,138,787 | |||
Non-compliance penalty for SEC registration requirement | (1,358,043) | |||
Interest expense | (2,129) | (21,836) | (119,311) | (37,998) |
Gain on extinguishment of debt | 34,899 | 842,925 | ||
Investment income | 5,765 | 683 | 25,868 | 69,959 |
Loss on extinguishment of BMSS payable | (265,500) | (265,500) | ||
Realized gain on sale of digital currencies | 23,608 | 219,247 | 665,218 | 451,341 |
Other expense | (1,734) | (1,746) | (15,471) | (881) |
Total other income (expense) | 60,409 | (69,152) | (10,381,603) | (1,141,122) |
Loss from continuing operations before income taxes | (1,834,120) | (6,526,940) | (16,862,848) | (51,147,260) |
Deferred income tax benefit | 3,525,000 | |||
Loss from continuing operations | (1,834,120) | (6,526,940) | (16,862,848) | (47,622,260) |
Discontinued operations | ||||
Income from operations | 96,132 | |||
Income from discontinued operations | 96,132 | |||
Net loss | (1,834,120) | (6,526,940) | (16,862,848) | (47,526,128) |
Net (income) loss attributable to non-controlling interest | (19) | 296,982 | 221,384 | 929,158 |
Net loss attributable to Riot Blockchain | $ (1,834,139) | $ (6,229,958) | $ (16,641,464) | $ (46,596,970) |
Basic and diluted net loss per share: | ||||
Continuing operations attributable to Riot Blockchain | $ (0.08) | $ (0.46) | $ (0.93) | $ (3.57) |
Discontinued operations attributable to Riot Blockchain | 0.01 | |||
Net loss per share | $ (0.08) | $ (0.46) | $ (0.93) | $ (3.56) |
Basic and diluted weighted average number of shares outstanding | 23,371,856 | 14,197,763 | 17,971,541 | 13,340,122 |
Revenue - digital currency mining [Member] | ||||
Revenue: | ||||
Total Revenue | $ 1,714,991 | $ 2,342,508 | $ 5,563,952 | $ 6,087,405 |
License fees [Member] | ||||
Revenue: | ||||
Total Revenue | $ 24,174 | $ 24,175 | $ 72,523 | $ 72,524 |
Condensed Interim Consolidate_2
Condensed Interim Consolidated Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Preferred Stock | Common Stock [Member] | Accumulated Deficit | Total Riot Blockchain Stockholder's Equity [Member] | Noncontrolling Interest [Member] | Total |
BALANCE at Dec. 31, 2017 | $ 7,745,266 | $ 180,387,518 | $ (139,263,480) | $ 48,869,304 | $ 758,095 | $ 49,627,399 |
BALANCE, shares at Dec. 31, 2017 | 1,458,001 | 11,622,112 | ||||
Delivery of common stock underlying restricted stock units | ||||||
Delivery of common stock underlying restricted stock units, shares | 124,583 | |||||
Common stock issued with convertible notes | ||||||
Common stock issued for asset purchase - Prive | $ 8,480,000 | 8,480,000 | 8,480,000 | |||
Common stock issued for asset purchase - Prive, shares | 800,000 | |||||
Common stock escrow shares issued for asset purchase - Prive | ||||||
Common stock escrow shares issued for asset purchase - Prive, shares | 200,000 | |||||
Preferred stock converted to Common stock | $ (7,190,157) | $ 7,190,157 | ||||
Preferred stock converted to Common stock, shares | (1,353,505) | 1,353,505 | ||||
Exercise of warrants | $ 350,000 | 350,000 | 350,000 | |||
Exercise of warrants, shares | 100,000 | |||||
Stock-based compensation | $ 4,147,190 | 4,147,190 | 4,147,190 | |||
Stock-based compensation, shares | ||||||
Exercise of stock options | $ 78,522 | 78,522 | 78,522 | |||
Exercise of stock options, shares | 19,533 | |||||
Common stock issued for services | $ 277,940 | 277,940 | 277,940 | |||
Common stock issued for services, shares | 20,754 | |||||
Refund of escrow dividend | 64,380 | 64,380 | 64,380 | |||
Sale of Riot shares held by Tess Pay, Inc. | $ 505,729 | 505,729 | 505,729 | |||
Sale of Riot shares held by Tess Pay, Inc., shares | ||||||
Stock issued for the extinguishment of the BMSS payable | $ 265,500 | 265,500 | 265,500 | |||
Stock issued for the extinguishment of the BMSS payable, shares | 50,000 | |||||
Sale of common shares by Tess Pay, Inc. | $ 110,620 | 110,620 | 109,826 | 220,446 | ||
Sale of common shares by Tess Pay, Inc., shares | ||||||
Cashless exercise of stock purchase warrants | ||||||
Cashless exercise of stock purchase warrants, shares | 3,215 | |||||
Non-controlling interest - Logical Brokerage | 40,542 | 40,542 | ||||
Net income (loss) attributable to non-controlling interest | (929,158) | (929,158) | ||||
Net loss | (46,596,970) | (46,596,970) | (46,596,970) | |||
BALANCE at Sep. 30, 2018 | $ 555,109 | $ 201,793,176 | (185,796,070) | 16,552,215 | (20,695) | 16,531,520 |
BALANCE, shares at Sep. 30, 2018 | 104,496 | 14,293,702 | ||||
BALANCE at Jun. 30, 2018 | $ 3,734,512 | $ 196,396,764 | (179,630,492) | 20,500,784 | 166,460 | 20,667,244 |
BALANCE, shares at Jun. 30, 2018 | 703,000 | 13,645,198 | ||||
Preferred stock converted to Common stock | $ (3,179,403) | $ 3,179,403 | ||||
Preferred stock converted to Common stock, shares | (598,504) | 598,504 | ||||
Stock-based compensation | $ 1,655,160 | 1,655,160 | 1,655,160 | |||
Stock-based compensation, shares | ||||||
Refund of escrow dividend | 64,380 | 64,380 | 64,380 | |||
Sale of Riot shares held by Tess Pay, Inc. | $ 185,729 | 185,729 | 185,729 | |||
Sale of Riot shares held by Tess Pay, Inc., shares | ||||||
Stock issued for the extinguishment of the BMSS payable | $ 265,500 | 265,500 | 265,500 | |||
Stock issued for the extinguishment of the BMSS payable, shares | 50,000 | |||||
Sale of common shares by Tess Pay, Inc. | $ 110,620 | 110,620 | 109,827 | 220,447 | ||
Sale of common shares by Tess Pay, Inc., shares | ||||||
Net income (loss) attributable to non-controlling interest | (296,982) | (296,982) | ||||
Net loss | (6,229,958) | (6,229,958) | (6,229,958) | |||
BALANCE at Sep. 30, 2018 | $ 555,109 | $ 201,793,176 | (185,796,070) | 16,552,215 | (20,695) | 16,531,520 |
BALANCE, shares at Sep. 30, 2018 | 104,496 | 14,293,702 | ||||
BALANCE at Dec. 31, 2018 | $ 69,059 | $ 202,917,443 | (197,199,197) | 5,787,305 | (1,296,293) | 4,491,012 |
BALANCE, shares at Dec. 31, 2018 | 13,000 | 14,519,058 | ||||
Delivery of common stock underlying restricted stock units | ||||||
Delivery of common stock underlying restricted stock units, shares | 106,251 | |||||
Common stock issued with convertible notes | $ 255,000 | 255,000 | 255,000 | |||
Common stock issued with convertible notes, shares | 150,000 | |||||
Common stock issued in connection with conversion of notes payable | $ 10,225,959 | 10,225,959 | $ 10,225,959 | |||
Common stock issued in connection with conversion of notes payable, shares | 1,813,500 | 1,813,500 | ||||
Reclassification of warrant liability to equity | $ 5,438,660 | 5,438,660 | $ 5,438,660 | |||
Reclassification of warrant liability to equity, shares | ||||||
Preferred stock converted to Common stock | $ (46,753) | $ 46,753 | ||||
Preferred stock converted to Common stock, shares | (8,801) | 8,801 | ||||
Stock-based compensation | $ 431,430 | 431,430 | 431,430 | |||
Stock-based compensation, shares | ||||||
Issuance of common stock, net of offering costs/At-the-market offering | $ 22,659,062 | 22,659,062 | 22,659,062 | |||
Issuance of common stock, net of offering costs/At-the-market offering, shares | 7,608,785 | |||||
Net income (loss) attributable to non-controlling interest | (221,384) | (221,384) | ||||
Deconsolidation of Tess | 1,552,848 | 1,552,848 | ||||
Net loss | (16,641,464) | (16,641,464) | (16,641,464) | |||
BALANCE at Sep. 30, 2019 | $ 22,306 | $ 241,974,307 | (213,840,661) | 28,155,952 | 35,171 | 28,191,123 |
BALANCE, shares at Sep. 30, 2019 | 4,199 | 24,206,395 | ||||
BALANCE at Jun. 30, 2019 | $ 26,556 | $ 238,082,374 | (212,006,522) | 26,102,408 | 35,152 | 26,137,560 |
BALANCE, shares at Jun. 30, 2019 | 4,999 | 22,625,111 | ||||
Preferred stock converted to Common stock | $ (4,250) | $ 4,250 | ||||
Preferred stock converted to Common stock, shares | (800) | 800 | ||||
Stock-based compensation | $ 81,362 | 81,362 | 81,362 | |||
Stock-based compensation, shares | ||||||
Issuance of common stock, net of offering costs/At-the-market offering | $ 3,806,321 | 3,806,321 | 3,806,321 | |||
Issuance of common stock, net of offering costs/At-the-market offering, shares | 1,580,484 | |||||
Net income (loss) attributable to non-controlling interest | 19 | 19 | ||||
Net loss | (1,834,139) | (1,834,139) | (1,834,139) | |||
BALANCE at Sep. 30, 2019 | $ 22,306 | $ 241,974,307 | $ (213,840,661) | $ 28,155,952 | $ 35,171 | $ 28,191,123 |
BALANCE, shares at Sep. 30, 2019 | 4,199 | 24,206,395 |
Condensed Interim Consolidate_3
Condensed Interim Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (16,862,848) | $ (47,526,128) |
Income from discontinued operations | 96,132 | |
Loss from continuing operations | (16,862,848) | (47,622,260) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities of continuing operations: | ||
Stock-based compensation | 431,430 | 4,147,189 |
Depreciation and amortization | 70,482 | 5,685,664 |
Deferred income tax benefit | (3,525,000) | |
Amortization of license fee revenue | (72,523) | (72,523) |
Amortization of right of use assets | 1,726,731 | |
Common stock issued for services | 277,940 | |
Common stock issued for the extinguishment of the BMSS payable | 265,500 | |
Loss on issuance of convertible notes, common stock and warrants | 6,154,660 | |
Change in fair value of convertible notes | 3,895,233 | |
Change in fair value of warrant liability | 2,869,726 | |
Gain on deconsolidation of Tess | (1,138,787) | |
Gain on extiguishment of accounts payable, other liabilities and accrued interest | (842,925) | |
Impairment of property and equipment | 26,858,023 | |
Impairment of digital currencies | 372,124 | 3,374,976 |
Realized gain on sale of digital currencies | (665,218) | (451,341) |
Accrued interest on Verady investment | (20,200) | |
Changes in assets and liabilities: | ||
Prepaid contracts | (1,584,699) | |
Prepaid expenses and other current assets | (756,135) | (1,417,007) |
Digital currencies - mining, net of mining pool operating fees | (5,452,674) | (6,087,405) |
Accounts payable | (1,798,539) | 2,983,941 |
Accrued expenses | 882,195 | 1,271,114 |
Lease liability | (1,725,578) | |
Net cash used in operating activities of continuing operations | (12,932,846) | (15,895,888) |
Net cash used in operating activities of discontinued operations | (68,824) | |
Net cash used in operating activities | (12,932,846) | (15,964,712) |
Cash flows from investing activities - continuing operations: | ||
Proceeds from sale of digital currencies | 3,196,310 | 7,371,172 |
Purchase of digital currencies | (5,722,545) | |
Purchases of property and equipment | (8,569) | (20,311,436) |
Purchases of other investments | (6,412,726) | |
Security deposits | (703,275) | |
Patent costs incurred | (26,566) | (32,850) |
Investment in Logical Brokerage, net of cash acquired | (516,918) | |
Purchase of developed technology by Tess Pay, Inc. | (531,176) | |
Net cash provided by (used in) investing activities | 3,161,175 | (26,859,754) |
Cash flows from financing activities - continuing operations: | ||
Proceeds from issuance of convertible notes | 3,000,000 | 1,696,083 |
Repayment of notes payable and other obligations | (950,000) | (135,574) |
Proceeds from the issuance of common stock / At-the-market offering | 23,610,642 | |
Offering costs for the issuance of common stock / At-the-market offering | (951,580) | |
Proceeds from exercise of warrants | 350,000 | |
Proceeds from exercise of stock options | 78,522 | |
Proceeds from sale of Riot shares held by Tess Pay, Inc. | 505,729 | |
Proceeds form the sale of common shares sold by Tess Pay, Inc. | 220,446 | |
Refund of escrow dividend | 64,380 | |
Net cash provided by financing activities of continuing operations | 24,709,062 | 2,779,586 |
Net increase (decrease) in cash and cash equivalents | 14,937,391 | (40,044,880) |
Cash and cash equivalents at beginning of period | 225,390 | 41,651,965 |
Cash and cash equivalents at end of period | 15,162,781 | 1,607,085 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 6,585 | |
Cash paid for taxes | ||
Supplemental disclosure of noncash investing and financing activities: | ||
Conversion of notes payable to common stock | 10,225,959 | |
Reclassification of warrant liability to equity | 5,438,660 | |
Value of shares issued for Prive asset acquisition | $ 8,480,000 | |
Conversion of Preferred stock to Common stock | 46,753 | 7,190,157 |
Common stock issued in connection with conversion of notes payable | $ 255,000 | |
Deferred purchase price for BMSS | 1,350,000 | |
Digitial currencies used to purchase miners | $ 98,865 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Note 1. Organization: Nature of operations: Riot Blockchain, Inc. (“we,” “us,” “our,” the “Company,” “Riot” or “Riot Blockchain”) was originally organized on July 24, 2000, as a Colorado corporation. Effective October 19, 2017, the Company's name was changed to Riot Blockchain, Inc., from Bioptix, Inc., and changed its state of incorporation to Nevada from Colorado. The Company operates a digital currency mining operation, which utilizes specialized computers (also known as “miners”) that generate digital currency (primarily bitcoin) from the blockchain. The Company acquired approximately 8,000 miners through its acquisition of Kairos Global Technology, Inc. (“Kairos”) in November 2017, and from Prive Technologies, Inc. (“Prive”), and separately from Blockchain Mining Supply & Services Ltd. (“BMSS”) in February 2018. |
Liquidity and Financial Conditi
Liquidity and Financial Condition | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity and Financial Condition | Note 2. Liquidity and Financial Condition: The Company has experienced recurring losses and negative cash flows from operations. At September 30, 2019, the Company had approximate balances of cash and cash equivalents of $15.2 million, digital currencies of $3.2 million, working capital of $16.5 million, total stockholders' equity of $28.2 million and an accumulated deficit of $213.8 million. To date, the Company has, in large part, relied on equity and debt financing to fund its operations. The Company expects to continue to incur losses from operations for the near-term and these losses could be significant as the Company incurs costs and expenses associated with recent and potential future acquisitions, and development of the RiotX exchange platform, as well as public company, legal and administrative related expenses being incurred. As disclosed in Note 9, during January 2019, the Company issued a series of Senior Secured Convertible Promissory Notes (the “Notes”), to investors for an aggregate principal amount of $3,358,333 and an equal value of warrants for the purchase of shares of the Company’s common stock (the “Warrants”) in exchange for a total investment of $3,000,000. During the nine months ended September 30, 2019, all of the Notes were converted into common stock and have been satisfied in full. The Company is closely monitoring its cash balances, cash needs and expense levels. The Company believes its current cash on hand is sufficient to meet its operating and capital requirements for at least the next twelve months from the date these financial statements are issued. As disclosed in Note 10, the Company entered into a Sales Agreement with H.C. Wainwright & Co., LLC (“H.C. Wainwright”) dated May 24, 2019 (the “Sales Agreement”), pursuant to which the Company may, from time to time, sell up to $100.0 million in shares of the Company’s common stock through H.C. Wainwright, acting as the Company’s sales agent and/or principal, in an at-the-market offering (“ATM Offering”). All sales of the shares in connection with the ATM Offering have been made pursuant to an effective shelf registration statement on Form S-3 filed with the U.S. Securities and Exchange Commission (“SEC”). The Company pays H.C. Wainwright a commission of approximately 3.0% of the aggregate gross proceeds the Company received from all sales of the Company's common stock under the Sales Agreement. The Company received net proceeds on sales under the Sales Agreement of approximately $22.7 million at a weighted average price of $3.10 (net of commissions) during the nine months ended September 30, 2019. |
Basis of presentation, summary
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements | Note 3. Basis of presentation, summary of significant accounting policies and recent accounting pronouncements: Basis of presentation and principles of consolidation The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the unaudited condensed interim consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2019 or for any future interim period. The unaudited condensed interim consolidated financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018 and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on April 2, 2019. The accompanying interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's unaudited condensed interim consolidated financial statements include estimates associated with revenue recognition, asset valuations, the useful lives and recoverability of long-lived assets, impairment analysis of intangibles, stock-based compensation, assumptions used in estimating the fair value of convertible notes and warrants, and the valuation allowance associated with the Company’s deferred tax assets. Significant Accounting Policies: For a detailed discussion about the Company’s significant accounting policies, see the Company’s December 31, 2018 consolidated financial statements included in its December 31, 2018 Annual Report on Form 10-K. Sequencing: On January 28, 2019, the Company adopted a sequencing policy under Accounting Standards Codification (“ASC”) 815-40-35 Derivatives and Hedging Notes Payable Fair Value Option: As described further in Note 9 - Notes and Other Obligations, As of September 30, 2019, all of the Notes were converted into 1,813,500 shares of the Company’s common stock valued at their estimated fair value at the time of conversion totaling approximately $10.2 million. Warrant Liability: The Company issued Warrants to purchase 1,908,144 shares of its common stock in connection with the Notes issued to the Investors in January 2019, and recorded these outstanding Warrants as a liability at fair value utilizing a Monte Carlo simulation model. This liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company's condensed interim consolidated statements of operations. As of June 25, 2019, the Company’s Notes had been converted in their entirety and the warrant liability was revalued and reclassified to equity, because the Warrants are no longer subject to the Company’s sequencing policy as described above. Leases: Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term. The Company continues to account for leases in the prior period financial statements under ASC Topic 840. Loss per share : Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company excludes its unvested restricted shares and escrow shares from the net loss per share calculation. The escrow shares are excluded due to their related contingencies, the inclusion of which would result in anti-dilution. Since the Company has net losses attributable to Riot Blockchain, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share at September 30, 2019 and 2018 because their inclusion would be anti-dilutive are as follows: September 2019 2018 Warrants to purchase common stock 3,574,257 1,671,113 Options to purchase common stock 12,000 162,000 Escrow shares 200,000 200,000 Unvested restricted stock awards 38,917 665,188 Convertible Series B preferred shares 4,199 104,496 Total 3,829,373 2,802,797 Recently issued and adopted accounting pronouncements: In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases Leases In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment In August 2018, the FASB issued ASU 2018-15, “ Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is A Service Contract In November 2018, the FASB issued ASU 2018-18, C ollaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, . |
Digital Currencies
Digital Currencies | 9 Months Ended |
Sep. 30, 2019 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |
Digital Currencies | Note 4. Digital Currencies: The following table presents additional information about digital currencies: Beginning balance, January 1, 2019 $ 706,625 Revenue recognized from digital currencies mined 5,563,952 Mining pool operating fees (111,278 ) Purchase of miner equipment with digital currencies (98,865 ) Sale of digital currencies (3,196,310 ) Realized gain on sale of digital currencies 665,218 Impairment of digital currencies (372,124 ) Ending balance, September 30, 2019 $ 3,157,218 |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | Note 5 Fair value measurements: On January 28, 2019 the Company issued the Notes and Warrants in connection with the Notes. The Notes and Warrants were classified as liabilities and measured at fair value on the issuance date, with changes in fair value recognized as other expense on the consolidated statements of operations and disclosed in the unaudited condensed interim consolidated financial statements. As of June 27, 2019, in accordance with their original terms, all of the Notes were converted into a total of 1,813,500 shares of the Company’s common stock by their holders. A summary of weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s Notes and Warrants at the issuance date of January 28, 2019 and during the conversion of the Notes as of June 27, 2019, are as follows: Senior Secured Promissory Notes: January 28, 2019 As of June 27, 2019 (Unaudited) (Unaudited) Dividend yield 0% 0% Expected price volatility 119.5% 122.2%-127.1% Risk free interest rate 2.60% 2.07%-2.44% Expected term 1 year — Warrants: January 28, 2019 As of June 27, 2019 (Unaudited) (Unaudited) Dividend yield 0% 0 Expected price volatility 111.6% 119.9%-120.5% Risk free interest rate 2.58% 2.23%-2.58% Expected term 5 years 4 years, 10 months There were no assets or liabilities measured at fair value during the nine months ended September 30, 2018. Unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2019. Convertible Notes Warrant Liability Issuance of senior secured convertible notes $ 6,330,726 $ — Issuance of warrants in connection with convertible notes — 2,568,934 Balance at January 28, 2019 6,330,726 2,568,934 Change in fair value 1,644,582 2,753,228 Balance at March 31, 2019 7,975,308 5,322,162 Change in fair value 2,250,651 116,498 Conversion of convertible notes to common stock (10,225,959 ) — Reclassification of warrant liability to equity — (5,438,660 ) Balance at September 30, 2019 $ — $ — |
Investment in Coinsquare
Investment in Coinsquare | 9 Months Ended |
Sep. 30, 2019 | |
Investments, All Other Investments [Abstract] | |
Investment in Coinsquare | Note 6. Investment in Coinsquare: In September 2017, the Company acquired a minority interest for $3.0 million in Coinsquare, which operates a digital crypto-currency exchange platform in Canada. During February 2018, the Company invested an additional $6.4 million to acquire additional common stock of Coinsquare. The investment included an additional equity investment of $2.8 million that was part of an approximate $24 million financing by Coinsquare. Additionally, warrants acquired in the original investment were exercised in exchange of a cash payment of $3.6 million. These additional investments resulted in a current ownership in Coinsquare by the Company of approximately 12% based upon Coinsquare’s issued and outstanding shares. The Company has evaluated the guidance in ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities |
Investment in Tess
Investment in Tess | 9 Months Ended |
Sep. 30, 2019 | |
Investments, All Other Investments [Abstract] | |
Investment in Tess | Note 7. Investment in Tess: In October 2017, the Company acquired approximately 52.01% of TessPay Inc. (formerly 1172767 B.C. Ltd) (“Tess”), which is developing blockchain solutions for telecommunications companies. During the year ended December 31, 2018, Tess issued approximately 189,000 of its common shares, reducing the investment percentage held by the Company from 52.01% to 50.2%. On April 10, 2019, Tess closed on a funding agreement under which approximately 23.8 million shares of Tess were issued for CAD $1.2 million. As a result of this funding, the Company’s ownership in Tess was reduced to approximately 9% and subsequently Tess was no longer being consolidated in the Company’s consolidated financial statements. As of June 30, 2019, the Company evaluated its remaining interest in Tess under the guidance of ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities April 10, 2019 Tess shares held by Riot Blockchain, Inc. 2,708,333 Per share fair value $ 0.03 Fair value of Tess shares held by Riot Blockchain, Inc. $ 90,174 The Company accounts for deconsolidation of subsidiaries in which it loses controlling interest in the financial interest of the subsidiary in accordance with Accounting Standards Codification (“ASC”) 810-10-40 – “Consolidation”. The deconsolidation of Tess resulted in a gain of approximately $1.1 million calculated as follows: Current assets $ 130,432 Less: Accounts payable 761,875 Accrued expenses 273,935 Convertible notes 1,696,083 Net liabilities (2,601,461 ) Non-controlling interest share 1,552,848 Sub-total (1,048,613 ) Less: fair value of shares owned by Riot Blockchain 90,174 Gain on deconsolidation of Tess $ (1,138,787 ) |
Investment in Verady
Investment in Verady | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment in Verady | Note 8. Investment in Verady: During November 2017, the Company made a $200,000 investment in a convertible note as part of a series of notes issued by Verady, LLC (“Verady”). The notes are unsecured, subordinated to other approved liabilities, mature December 31, 2022, bear interest at 6%, unless previously repaid or converted and contain other conditions and restrictions, all as defined under the subscription documents. The Verady convertible note was previously recorded at fair value (which approximates cost). The conversion rate of the convertible note is defined based upon the possible occurrence of certain defined events which may or may not occur. The Company has no other relationship or rights associated with Verady. Founded in 2016, Verady is privately held and recently launched VeraNet, a decentralized network of financial reporting and accounting tools targeted to the needs of the digital currency community. During the three months ended September 30, 2019, Verady completed a financing that under the terms of the Company’s original investment, resulted in the automatic conversion of the Company’s convertible note plus accrued interest totaling approximately $220,000, into equity of Verady. The automatic conversion resulted in a current ownership in Verady by the Company of approximately 1%. The Company has evaluated the guidance in ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities |
Notes and Other Obligations
Notes and Other Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes and Other Obligations | Note 9. Notes and Other Obligations: Senior Secured Convertible Promissory Notes and Warrants On January 28, 2019, in connection with a private financing (the “Private Financing”), the Company issued the Notes, to investors (collectively, the “Investors” and each an “Investor”) for an aggregate principal amount of $3,358,333, along with Warrants for the purchase of and equal value of shares of the Company’s common stock in exchange for $3,000,000 of private financing. The Notes were convertible into shares of the Company’s common stock at any time after the issuance date, provided that at no time would the Company be required to issue shares in excess of the aggregate number of shares of its commons stock outstanding. The Notes were set to mature twelve months from date of issuance and accrue interest at a rate of 8% per annum, with twelve months of interest guaranteed. The Notes were subject to prepayment penalties, default conditions and other terms and conditions, as further defined in the Financing Agreements (the “Financing Agreements”) as disclosed in the Company’s current report on Form 8-K filed with the SEC on February 1, 2019. As additional consideration for the investment, the Company issued a total of 150,000 restricted common shares to the Investors. The Notes were convertible into shares of the common stock of the Company at a price equal to the lower of $2.00 or 80% of the lowest volume-weighted adjusted price of shares of the Company’s common stock in the twenty trading days prior to the conversion date, subject to adjustments in certain cases as defined in the Financing Agreements. Provided, however, that according to the Notes, the cumulative shares of the Company’s common stock issuable upon conversion of the Notes cannot exceed 19.99% of the total number of the Company’s outstanding common stock as of January 28, 2019. Pursuant to the Financing Agreements between the Company and the Investors, the Company granted the Investors a security interest in its assets to secure repayment of the Notes. Further to the Financing Agreements, the Company also reserved a number of shares of its common stock equal to 300% of the total number of shares issuable upon full conversion of the Notes. Due to the complexity and number of embedded features within the Notes and as permitted under applicable accounting guidance, the Company elected to account for the Notes and all the embedded features under the fair value option, which records the Notes at fair value rather than at historical cost, with changes in fair value recorded in the condensed interim consolidated statements of operations. Direct costs and fees incurred to issue the Notes were recognized in earnings as incurred and were not deferred. On the initial measurement date of January 28, 2019, the fair value of the Notes was estimated at $6,330,726. Upfront costs and fees related to items for which the fair value option was elected were approximately $358,333 and were recorded as a component of other expenses for the nine months ended September 30, 2019. In connection with the Notes, the Company entered into registration rights agreement with the Investors. The Company filed a registration statement with the SEC covering the equity rights and any other shares issuable in connection with the Notes on March 14, 2019 and the registration statement was declared effective on April 29, 2019. During the nine months ended September 30, 2019, holders of the Notes issued on January 28, 2019, converted 100% of the Notes into 1,813,500 shares of the Company’s common stock. The aggregate fair value of the Notes converted during the nine months ended September 30, 2019 was $10.2 million, an increase in fair value of $3.9 million, which is reflected on the interim condensed consolidated statements of operations for the nine months ended September 30, 2019, as change in fair value of convertible note (See Note 5 to the unaudited condensed interim consolidated financial statements). Accordingly, having satisfied the Notes in full, the Company’s obligations under the Notes have been cancelled. In connection with the Private Financing, the Company also issued the Warrants to the Investors to acquire up to an aggregate of 1,908,144 shares of the Company’s common stock at an exercise price of $1.94 per share. The Warrants are exercisable by the Investors beginning on July 29, 2019, through the fifth year anniversary of the effective date of the Private Financing; provided, however, each Investor’s beneficial ownership of the Company’s common stock may not exceed 4.99% of the total outstanding shares of the Company’s common stock without first providing sixty days’ notice to the Company, and, in any event, the ownership, including beneficial ownership, of shares of the Company’s common stock by each of the Investors, shall not exceed 9.99% of the total outstanding shares of our common stock. Tess Investment As of March 28, 2018, Tess, a subsidiary of the Company, entered into a note purchase agreement with a private investor under which a convertible promissory note issued by Tess in the principal amount CAD $2.2 million (the “Tess Convertible Note”) and cash proceeds of CAD $2.2 million were placed into a third-party controlled escrow account. Upon the successful achievement of conditions defined under the escrow agreement relating to closing of a transaction between Tess and Cresval Capital Corp, (“Cresval”) whereby Tess and Cresval would merge as provided in the merger agreements and Tess would become publicly traded on the TSX-V exchange, the then-remaining cash and the Tess Convertible Note would be issued to Tess and the investor, respectively. The Tess Convertible Note was convertible at $0.10 per share of the merged entity, as defined, subject to certain adjustments. On February 15, 2019, Cresval terminated its definitive agreement with Tess due to Tess’s inability to complete one of the specified closing conditions in the agreement. The interim release consisted of CAD $1.0 million (USD $775,555) of cash released to Tess and an unsecured promissory note issued by Tess (“Tess Promissory Note”) released to the investor. The Tess Promissory Note bears interest at 5%, is unsecured and due in 2021. On August 23, 2018, the final release from escrow occurred. Tess received approximately USD $921,000, bringing the total Tess Promissory Note balance to approximately USD $1,696,000. During the nine months ended September 30, 2019, the Company’s ownership in Tess was reduced to 9% and as a result, Tess is no longer consolidated in the Company’s unaudited interim condensed consolidated financial statements (see Note 7). BMSS and Other Liabilities Settlements On February 21, 2018, the Company completed an asset purchase under an agreement (the "BMSS Purchase Agreement") with BMSS, to purchase the 3,000 AntMiner S9 bitcoin mining machines owned by BMSS Equipment (the "BMSS Equipment"). Pursuant to the BMSS Purchase Agreement, the Company purchased the BMSS Equipment for aggregate consideration of Eight Million Five Hundred Thousand Dollars ($8,500,000). As of June 27, 2019, in connection with the BMSS agreement, the Company owed approximately $1,340,000 of principal and interest and the Company and BMSS agreed to a one-time settlement payment totaling $950,000. The remaining $390,000 was recorded as a gain on extinguishment of notes and interest, and included in other income in the accompanying interim consolidated statement of operations for the nine months ended September 30, 2019. During the nine months ended September 30, 2019, the Company reached agreements with certain creditors to settle the amounts of outstanding liabilities at a discount. The computed value of the modifications as compared to the liability balances were recorded as other income from the gains on extinguishment of debt. The liabilities settled excluding BMSS, during the period totaled approximately $2,082,000 in exchange for cash payments of $1,629,000, resulting in a gain of approximately $453,000 recognized in the nine months ended September 30, 2019. |
Stockholders' equity
Stockholders' equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' equity | Note 10. Stockholders’ equity: Preferred Stock: During the nine months ended September 30, 2019, 8,801 shares of the Company’s Series B preferred stock were converted into 8,801 shares of the Company’s common stock. During the nine months ended September 30, 2018, 1,353,505 shares of the Company’s Series B preferred stock were converted into 1,353,505 shares of the Company’s common stock. At-the-Market Equity Offering: The Company entered into a Sales Agreement with H.C. Wainwright dated May 24, 2019, pursuant to which the Company may, from time to time, sell up to $100 million in shares of the Company’s common stock through H. C. Wainwright, as the Company’s sales agent and/or principal, in the ATM Offering. All sales of the shares have been made pursuant to an effective shelf registration statement on Form S-3 filed with the SEC. The Company pays H.C. Wainwright a commission of approximately 3.0% of the aggregate gross proceeds the Company received from all sales of the Company's common stock under the Sales Agreement. The Company received net proceeds on sales of 7,608,785 shares of common stock under the Sales Agreement of approximately $22.7 million at a weighted average price of $3.10 (excluding commissions) during the nine months ended September 30, 2019. Restricted Stock: During the nine months ended September 30, 2019, 106,251 shares of common stock were issued, related to fully vested restricted stock rights previously granted under the Company’s 2017 Equity Incentive Plan. Additionally, a total of 48,500 restricted stock rights were awarded to a consultant and advisory board members. The shares vest monthly over one to two year periods. |
Stock based compensation, optio
Stock based compensation, options and warrants | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock based compensation, options and warrants | Note 11. Stock based compensation, options and warrants: Stock based compensation: The Company’s stock-based compensation expenses recognized during the nine months ended September 30, 2019 and 2018, were attributable to selling, general and administrative expenses, which are included in the accompanying unaudited condensed interim consolidated statements of operations. The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2019 and 2018, granted under the Company’s 2017 equity incentive plan (the “Plan”), from the following categories: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Restricted stock awards under the Plan $ 81,362 $ 1,434,650 $ 372,932 $ 3,634,193 Stock option awards under the Plan — 220,510 58,498 512,997 Total stock-based compensation $ 81,362 $ 1,655,160 $ 431,430 $ 4,147,190 Restricted stock rights: A summary of the Company’s unvested restricted stock rights activity in the nine months ended September 30, 2019 is presented here: Number of Shares Weighted Average Grant-Date Unvested at January 1, 2019 95,939 $ 12.49 Vested (50,522 ) $ 8.23 Granted 48,500 $ 3.78 Forfeited (55,000 ) $ 14.95 Unvested at September 30, 2019 38,917 $ 3.68 During the nine months ended September 30, 2019, the Company granted 48,500 shares of restricted stock rights to consultants. The total fair value of restricted stock rights granted during the nine months ended September 30, 2019 was approximately $0.2 million. The fair value of each restricted stock right was based upon the closing stock price on the grant date. During the nine months ended September 30, 2019, forfeitures of restricted common stock rights totaled 55,000, which consisted of rights forfeited due to the termination of three of the Company’s officers. The fair value of restricted stock rights is measured based on their fair value on the date of grant and amortized over the vesting period of twelve to twenty-four months. As of September 30, 2019, there was approximately $0.1 million of unrecognized compensation cost related to unvested restricted stock rights, which is expected to be recognized over a remaining weighted-average vesting period of approximately 10 months. Stock incentive plan options: A summary of activity under the Plan for the nine months ended September 30, 2019 is presented below: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2019 62,000 $ 15.71 8.2 $ — Forfeited (50,000 ) $ 18.50 — — Outstanding at September 30, 2019 12,000 $ 4.09 4.0 $ — Exercisable at September 30, 2019 12,000 $ 4.09 4.0 $ — Aggregate intrinsic value represents the total intrinsic value (the difference between the Company’s closing stock price on September 30, 2019 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders, had all option holders been able to, and in fact had, exercised their options on September 30, 2019. Other common stock purchase warrants: Following is a summary of outstanding warrants that were issued outside of the Plan for the nine months ended September 30, 2019: Shares Underlying Options/Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2019 1,671,113 $ 39.47 2.0 $ — Granted 1,908,144 $ 1.94 5.2 $ — Forfeited (5,000 ) $ 7.90 — $ — Outstanding at September 30, 2019 3,574,257 $ 19.48 3.1 $ — Exercisable at September 30, 2019 3,574,257 $ 19.48 3.1 $ — The Company granted Warrants to purchase 1,908,144 shares of its common stock with an exercise price of $1.94, in connection with the Notes issued on January 28, 2019. (See Note 9). The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between the Company’s closing stock price on September 30, 2019 and the exercise price, multiplied by the number of in-the-money warrants) that would have been received by the warrant holders, had all warrant holders exercised their warrants on September 30, 2019. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Note 12. Discontinued Operations: During the quarter ended March 31, 2017, the Company made the decision to discontinue the operations of its wholly-owned subsidiary BDI. BDI had developed a proprietary Enhanced Surface Plasmon Resonance technology platform for the detection of molecular interactions. The decision to adopt this plan was made following an evaluation by the Company's Board of Directors in January 2017 of the estimated results of operations projected during the near to mid-term period for BDI, including consideration of product development required and updated sales forecasts, and estimated additional cash resources required. The Company substantially disposed of the assets and operations during 2017 by selling the assets and licensing the intellectual property rights. The Company has recognized the exit of BDI in accordance with ASC 205-20, Discontinued Operations The Company's historical financial statements have been revised to present the operating results of the BDI business as a discontinued operation. Liabilities related to the discontinued operations of BDI totaled approximately $16,000 in accounts payable as of September 30, 2019 and December 31, 2018, respectively. There were no results of discontinued operations for the three and nine months ended September 30, 2019 and the three months ended September 30, 2018. Summarized results of the discontinued operation are as follows for the nine months ended September 30, 2018: Revenue $ 137,000 Cost of revenue 41,000 Gross margin 96,000 Operating expenses — Operating income 96,000 Income from discontinued operations, net of tax $ 96,000 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Note 13. Leases: Oklahoma Lease Agreement. On February 27, 2018, Kairos entered into a lease agreement (the “Lease”) with 7725 Reno #1, LLC (the “Landlord”) to lease an approximately 107,600 square foot warehouse located in Oklahoma City, Oklahoma, including improvements thereon. Under the Lease, Kairos has the right to operate from the premises on a 24 hour/seven day a week basis. The initial term of the Lease was scheduled to terminate on February 15, 2019; however the term of the Lease was extended by agreement of the parties as discussed below. Prior to the first amendment of the Lease discussed below, the base rent for the facility was equal to $55.95/kW per month for a total of 4 Megawatts (MW) of available electrical power, or $223,800 per month. On March 26, 2018, Kairos entered into a first amendment to the Lease, whereby the Landlord agreed to increase the electrical power available for Kairos’s use from 6MW to 12MW, and, effective as of the date when such additional power became available for use, the base rent under the Lease was increased to approximately $664,760 per month. Effective November 29, 2018, Kairos entered into the second amendment to the Lease which provides the following: • extends the initial term of the Lease through August 19, 2019; • monthly base rent of $235,000 for December 2018, $230,000 for January and $190,000 per month thereafter for the duration of the Lease, including any renewals; • changes the monthly electricity usage charges; and • Kairos shall have the option to renew the Lease for up to two, three-month periods after expiration of the initial term. On May 15, 2019, the Company renewed the Lease for the first renewal term of three months, extending the lease through November 15, 2019. On August 15, 2019, the Company renewed the Lease for the second renewal term of three months, extending the lease through February 15, 2020. Corporate Lease Agreement On April 9, 2018, the Company entered into a commercial lease covering 1,694 rentable square feet of office space in Fort Lauderdale, Florida, with a third-party. The lease is for an initial term of thirty-nine months, with one five-year option to renew. The lease requires initial monthly rent of approximately $7,000, including base rent and associated operating expenses. Operating Leases At September 30, 2019, the Company had operating lease liabilities of approximately $0.9 million and right of use assets of approximately $0.9 million, which are included in the condensed interim consolidated balance sheet. The following summarizes quantitative information about the Company’s operating leases: Lease cos Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating lease cost $ 592,593 $ 1,793,778 Variable lease cost 711,113 2,348,448 Operating lease expense 1,303,706 4,142,226 Short-term lease rent expense 4,620 13,860 Total rent expense $ 1,308,326 $ 4,156,086 Other information Operating cash flows from operating leases $ 584,395 $ 1,792,625 Right of use assets exchanged for new operating lease liabilities $ 558,314 $ 2,664,126 Weighted-average remaining lease term – operating leases 0.6 years 0.6 years Weighted-average discount rate – operating leases 10.00 % 10.00 % Maturities of the Company’s operating lease liabilities, are as follows (unaudited): For the three months ended December 31, 2019 $ 584,395 For the year ended December 31, 2020 343,731 For the year ended December 31, 2021 35,040 Total $ 963,166 Less present value discount (24,618 ) Operating lease liabilities $ 938,548 Rent expense, recorded on a straight-line basis, was approximately $1.3 million and $1.9 million for the three months ended September 30, 2019 and 2018, respectively; and was approximately $4.2 million and $3.7 million for the nine months ended September 30, 2019 and 2018, respectively. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Note 14. Commitments and contingencies: Contingencies: The Company, and its subsidiaries, are subject at times to various claims, lawsuits and governmental proceedings relating to the Company’s business and transactions arising in the ordinary course of business. The Company cannot predict the final outcome of such proceedings. Where appropriate, the Company vigorously defends such claims, lawsuits and proceedings. Some of these claims, lawsuits and proceedings seek damages, including, consequential, exemplary or punitive damages, in amounts that could, if awarded, be significant. Certain of the claims, lawsuits and proceedings arising in ordinary course of business are covered by the Company’s insurance program. The Company maintains property, and various types of liability insurance in an effort to protect the Company from such claims. In terms of any matters where there is no insurance coverage available to the Company, or where coverage is available and the Company maintains a retention or deductible associated with such insurance, the Company may establish an accrual for such loss, retention or deductible based on current available information. In accordance with accounting guidance, if it is probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements, and the amount of loss is reasonably estimable, then an accrual for the cost to resolve or settle these claims is recorded by the Company in the accompanying consolidated balance sheets. If it is reasonably possible that an asset may be impaired as of the date of the financial statement, then the Company discloses the range of possible loss. Paid expenses related to the defense of such claims are recorded by the Company as incurred and paid and included in the accompanying consolidated statements of operations. Management, with the assistance of outside counsel, may from time to time adjust such accruals according to new developments in the matter, court rulings, or changes in the strategy affecting the Company’s defense of such matters. On the basis of current information, the Company does not believe there is a reasonable possibility that, other than with regard to the Class Action described below, any material loss, if any, will result from any claims, lawsuits and proceedings to which the Company is subject to either individually, or in the aggregate. On February 17, 2018, Creighton Takata filed an action asserting putative class action claims on behalf of the Company's stockholders in the United District Court for the District of New Jersey, Takata v. Riot Blockchain Inc., et al. Two additional, nearly identical complaints were subsequently filed by Richard Roys and Bruce Greenawalt in the United District States Court for the Southern District of Florida ( Roys v. Riot Blockchain Inc., et al. Greenawalt v. Riot Blockchain Inc., et al. On April 18, 2018, Joseph J. Klapper, Jr., filed a complaint against Riot Blockchain, Inc., and certain of its officers and directors in the United District Court for the District of New Jersey ( Klapper v. Riot Blockchain Inc., et al. Lead Plaintiff filed a consolidated complaint on January 15, 2019. Defendants filed motions to dismiss on March 18, 2019. In lieu of opposing defendants’ motions to dismiss, Lead Plaintiff filed another amended complaint on May 9, 2019. Defendants filed multiple motions to dismiss the amended complaint starting on September 3, 2019. Briefing on the motions to dismiss is expected to be completed on November 18, 2019. Subject to the outcome of the pending motions, defendants intend to continue to vigorously contest Lead Plaintiff’s allegations. Because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. Shareholder Derivative Cases On April 5, 2018, Michael Jackson filed a shareholder derivative complaint on behalf of the Company in the Supreme Court of the State of New York, County of Nassau, against certain of the Company's officers and directors, as well as against an investor ( Jackson v. Riot Blockchain, Inc., et al. On May 22, 2018, two additional shareholder derivative complaints were filed on behalf of the Company in the Eighth Judicial District Court of the State of Nevada in and for the County of Clark ( Kish v. O'Rourke, et al. Gaft v. O'Rourke, et al. On September 24, 2018, the court entered an order consolidating the Gaft Kish In re Riot BlockChain, Inc. Shareholder Derivative Litigation On October 9, 2018, another shareholder derivative complaint was filed on behalf of the Company in the United District Court for the Eastern District of New York ( Rotkowitz v. O'Rourke, et al. On October 22, 2018, a fifth shareholder derivative complaint was filed on behalf of the Company in the United District Court for the Southern District of New York ( Finitz v. O'Rourke, et al. Defendants intend to vigorously contest plaintiffs’ allegations in the shareholder derivative actions and plaintiffs’ right to bring the action in the name of Riot Blockchain. But because this litigation is still at this early stage, we cannot reasonably estimate the likelihood of an unfavorable outcome or the magnitude of such an outcome, if any. SEC Subpoena and Other Matters On April 9, 2018, the Company received a subpoena from the SEC, requesting documents and information. The SEC has continued to request information from the Company and the Company has been fully cooperating with the SEC in that investigation. Beneficial Ownership Pursuant to the rules of the SEC, the Company has consistently reported its beneficial ownership positions in its proxy and other filings where beneficial ownership disclosures are presented, for certain beneficial owners with respect to any person (including any “group” as that term is used in Section 13(d)(3) of the Securities and Exchange Act of 1934 (the “Exchange Act”) who is known to the Company to be the beneficial owner of more than 5% of the Company’s common stock. The Company has relied on each person who has reported to the SEC beneficial ownership of more than 5% of our common stock to provide complete and accurate information regarding their ownership, based on the reports filed by these persons. On September 7, 2018, a complaint was filed by the SEC (Case 1:18-cv-08175) and as subsequently amended, (the “Complaint”) against, among others, a number of individuals and entities some of whom the Company has previously disclosed as its beneficial owners, as well as, Mr. John O’Rourke III, the Company’s former chairman of the board of directors and chief executive officer who resigned from the Company on September 8, 2018, as disclosed in the Current Periodic Report on Form 8-K filed September 10, 2018. Other persons named in the Complaint have previously reported that they were beneficial owners of the Company’s common stock, however, the Company has no basis to determine whether any such persons may have operated as a control group, collectively beneficially owning more than 5% of the Company’s common stock. |
Tess Related Party Transactions
Tess Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Tess Related Party Transactions | Note 15. Tess Related Party Transactions: Tess related parties include: Powercases Inc., and 2227470 Ontario Inc., (companies that are wholly-owned by Jeffrey Mason, President and Chief Executive Officer of Tess), 1038088 Ontario Limited (a company that is wholly-owned by Fraser Mason, Chairman and Chief Financial Officer of Tess), and JLM Strategic Marketing (a proprietorship owned by Jennifer Mason, Manager Corporate Communications of Tess). The following table provides the total amount of transactions that have been entered into with Tess related parties and outstanding balances with Tess related parties as of and for the periods identified: Period Ended Services to Tess provided by (1) September 30, 2019 September 30, 2018 Powercases Inc. $ 231,328 $ 379,385 JLM Strategic Marketing $ — $ 267,304 1038088 Ontario Limited $ 45,062 $ 110,123 Payable to: September 30, 2019 December 31, 2018 Powercases Inc. $ — $ 37,250 JLM Strategic Marketing $ — $ 9,483 1038088 Ontario Limited $ — $ 52,053 (1) - 2019 amounts provided by related parties are up to the date of de-consolidation. During the period ended June 30, 2019 (up to the point of de-consolidation) and six months ended June 30, 2018, included in Tess's recorded services from related parties was approximately $260,000 and $180,000, respectively for Tess's key management personnel salaries. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16. Subsequent Events: Financing Subsequent to September 30, 2019, in connection with the Company’s Sales Agreement with H.C. Wainwright, the Company received gross proceeds of approximately $859,000 from the sale of 494,820 shares of common stock. Common Stock Subsequent to September 30, 2019, 30,000 shares of restricted common stock related to fully vested shares of restricted stock were issued under the Company’s 2017 Equity Incentive Plan. |
Basis of presentation, summar_2
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation and principles of consolidation | Basis of presentation and principles of consolidation The accompanying unaudited condensed interim consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. In the opinion of management, the accompanying unaudited condensed interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. The results for the unaudited condensed interim consolidated statement of operations are not necessarily indicative of results to be expected for the year ending December 31, 2019 or for any future interim period. The unaudited condensed interim consolidated financial statements do not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed interim consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2018 and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC on April 2, 2019. The accompanying interim condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ significantly from those estimates. The most significant accounting estimates inherent in the preparation of the Company's unaudited condensed interim consolidated financial statements include estimates associated with revenue recognition, asset valuations, the useful lives and recoverability of long-lived assets, impairment analysis of intangibles, stock-based compensation, assumptions used in estimating the fair value of convertible notes and warrants, and the valuation allowance associated with the Company’s deferred tax assets. |
Sequencing | Sequencing: On January 28, 2019, the Company adopted a sequencing policy under Accounting Standards Codification (“ASC”) 815-40-35 Derivatives and Hedging |
Notes Payable Fair Value Option | Notes Payable Fair Value Option: As described further in Note 9 - Notes and Other Obligations, As of September 30, 2019, all of the Notes were converted into 1,813,500 shares of the Company’s common stock valued at their estimated fair value at the time of conversion totaling approximately $10.2 million. |
Warrant Liability | Warrant Liability: The Company issued Warrants to purchase 1,908,144 shares of its common stock in connection with the Notes issued to the Investors in January 2019, and recorded these outstanding Warrants as a liability at fair value utilizing a Monte Carlo simulation model. This liability is subject to re-measurement at each balance sheet date, and any change in fair value is recognized in the Company's condensed interim consolidated statements of operations. As of June 25, 2019, the Company’s Notes had been converted in their entirety and the warrant liability was revalued and reclassified to equity, because the Warrants are no longer subject to the Company’s sequencing policy as described above. |
Leases | Leases: Effective January 1, 2019, the Company accounts for its leases under ASC 842, Leases In calculating the right of use asset and lease liability, the Company elects to combine lease and non-lease components as permitted under ASC 842. The Company excludes short-term leases having initial terms of 12 months or less from the new guidance as an accounting policy election, and recognizes rent expense on a straight-line basis over the lease term. The Company continues to account for leases in the prior period financial statements under ASC Topic 840. |
Loss per share | Loss per share : Basic net loss per share (“EPS”) of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company excludes its unvested restricted shares and escrow shares from the net loss per share calculation. The escrow shares are excluded due to their related contingencies, the inclusion of which would result in anti-dilution. Since the Company has net losses attributable to Riot Blockchain, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share at September 30, 2019 and 2018 because their inclusion would be anti-dilutive are as follows: September 2019 2018 Warrants to purchase common stock 3,574,257 1,671,113 Options to purchase common stock 12,000 162,000 Escrow shares 200,000 200,000 Unvested restricted stock awards 38,917 665,188 Convertible Series B preferred shares 4,199 104,496 Total 3,829,373 2,802,797 |
Recently issued and adopted accounting pronouncements | Recently issued and adopted accounting pronouncements: In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, Leases Leases In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment In August 2018, the FASB issued ASU 2018-15, “ Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is A Service Contract In November 2018, the FASB issued ASU 2018-18, C ollaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606, . |
Basis of presentation, summar_3
Basis of presentation, summary of significant accounting policies and recent accounting pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Antidilutive Securities | Since the Company has net losses attributable to Riot Blockchain, basic and diluted net loss per share is the same. Securities that could potentially dilute loss per share in the future were not included in the computation of diluted loss per share at September 30, 2019 and 2018 because their inclusion would be anti-dilutive are as follows: September 2019 2018 Warrants to purchase common stock 3,574,257 1,671,113 Options to purchase common stock 12,000 162,000 Escrow shares 200,000 200,000 Unvested restricted stock awards 38,917 665,188 Convertible Series B preferred shares 4,199 104,496 Total 3,829,373 2,802,797 |
Digital Currencies (Tables)
Digital Currencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | |
Summary of Additional Information About Digital Currencies | The following table presents additional information about digital currencies: Beginning balance, January 1, 2019 $ 706,625 Revenue recognized from digital currencies mined 5,563,952 Mining pool operating fees (111,278 ) Purchase of miner equipment with digital currencies (98,865 ) Sale of digital currencies (3,196,310 ) Realized gain on sale of digital currencies 665,218 Impairment of digital currencies (372,124 ) Ending balance, September 30, 2019 $ 3,157,218 |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Weighted Average Unobservable Inputs | A summary of weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s Notes and Warrants at the issuance date of January 28, 2019 and during the conversion of the Notes as of June 27, 2019, are as follows: Senior Secured Promissory Notes: January 28, 2019 As of June 27, 2019 (Unaudited) (Unaudited) Dividend yield 0% 0% Expected price volatility 119.5% 122.2%-127.1% Risk free interest rate 2.60% 2.07%-2.44% Expected term 1 year — Warrants: January 28, 2019 As of June 27, 2019 (Unaudited) (Unaudited) Dividend yield 0% 0 Expected price volatility 111.6% 119.9%-120.5% Risk free interest rate 2.58% 2.23%-2.58% Expected term 5 years 4 years, 10 months |
Schedule of Changes in Level 3 Liabilities Measured at Fair Value | The following table presents changes in Level 3 liabilities measured at fair value for the nine months ended September 30, 2019. Convertible Notes Warrant Liability Issuance of senior secured convertible notes $ 6,330,726 $ — Issuance of warrants in connection with convertible notes — 2,568,934 Balance at January 28, 2019 6,330,726 2,568,934 Change in fair value 1,644,582 2,753,228 Balance at March 31, 2019 7,975,308 5,322,162 Change in fair value 2,250,651 116,498 Conversion of convertible notes to common stock (10,225,959 ) — Reclassification of warrant liability to equity — (5,438,660 ) Balance at September 30, 2019 $ — $ — |
Investment in Tess (Tables)
Investment in Tess (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Fair Value Shares | As of April 10, 2019, the fair value of the Tess shares owned by the Company is approximately $0.1 million, calculated based upon the April 10, 2019 funding price as follows: April 10, 2019 Tess shares held by Riot Blockchain, Inc. 2,708,333 Per share fair value $ 0.03 Fair value of Tess shares held by Riot Blockchain, Inc. $ 90,174 |
Schedule of Calculation of Gain on Deconsolidation of Tess | The deconsolidation of Tess resulted in a gain of approximately $1.1 million calculated as follows: Current assets $ 130,432 Less: Accounts payable 761,875 Accrued expenses 273,935 Convertible notes 1,696,083 Net liabilities (2,601,461 ) Non-controlling interest share 1,552,848 Sub-total (1,048,613 ) Less: fair value of shares owned by Riot Blockchain 90,174 Gain on deconsolidation of Tess $ (1,138,787 ) |
Stock based compensation, opt_2
Stock based compensation, options and warrants (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation | The Company recognized total stock-based compensation expense during the three and nine months ended September 30, 2019 and 2018, granted under the Company’s 2017 equity incentive plan (the “Plan”), from the following categories: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Restricted stock awards under the Plan $ 81,362 $ 1,434,650 $ 372,932 $ 3,634,193 Stock option awards under the Plan — 220,510 58,498 512,997 Total stock-based compensation $ 81,362 $ 1,655,160 $ 431,430 $ 4,147,190 |
Summary of Restricted Plan Activity | A summary of the Company’s unvested restricted stock rights activity in the nine months ended September 30, 2019 is presented here: Number of Shares Weighted Average Grant-Date Unvested at January 1, 2019 95,939 $ 12.49 Vested (50,522 ) $ 8.23 Granted 48,500 $ 3.78 Forfeited (55,000 ) $ 14.95 Unvested at September 30, 2019 38,917 $ 3.68 |
Summary of Stock Incentive Plan Activity | A summary of activity under the Plan for the nine months ended September 30, 2019 is presented below: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2019 62,000 $ 15.71 8.2 $ — Forfeited (50,000 ) $ 18.50 — — Outstanding at September 30, 2019 12,000 $ 4.09 4.0 $ — Exercisable at September 30, 2019 12,000 $ 4.09 4.0 $ — |
Schedule of Changes in Outstanding Warrants | Following is a summary of outstanding warrants that were issued outside of the Plan for the nine months ended September 30, 2019: Shares Underlying Options/Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Aggregate Intrinsic Value Outstanding at January 1, 2019 1,671,113 $ 39.47 2.0 $ — Granted 1,908,144 $ 1.94 5.2 $ — Forfeited (5,000 ) $ 7.90 — $ — Outstanding at September 30, 2019 3,574,257 $ 19.48 3.1 $ — Exercisable at September 30, 2019 3,574,257 $ 19.48 3.1 $ — |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Summarized Results of Discontinued Operations | Summarized results of the discontinued operation are as follows for the nine months ended September 30, 2018: Revenue $ 137,000 Cost of revenue 41,000 Gross margin 96,000 Operating expenses — Operating income 96,000 Income from discontinued operations, net of tax $ 96,000 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Operating Leases | The following summarizes quantitative information about the Company’s operating leases: Lease cos Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating lease cost $ 592,593 $ 1,793,778 Variable lease cost 711,113 2,348,448 Operating lease expense 1,303,706 4,142,226 Short-term lease rent expense 4,620 13,860 Total rent expense $ 1,308,326 $ 4,156,086 Other information Operating cash flows from operating leases $ 584,395 $ 1,792,625 Right of use assets exchanged for new operating lease liabilities $ 558,314 $ 2,664,126 Weighted-average remaining lease term – operating leases 0.6 years 0.6 years Weighted-average discount rate – operating leases 10.00 % 10.00 % |
Schedule of Maturities of Operating Lease Liabilities | Maturities of the Company’s operating lease liabilities, are as follows (unaudited): For the three months ended December 31, 2019 $ 584,395 For the year ended December 31, 2020 343,731 For the year ended December 31, 2021 35,040 Total $ 963,166 Less present value discount (24,618 ) Operating lease liabilities $ 938,548 |
Tess Related Party Transactio_2
Tess Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Tess Related Party Transactions | The following table provides the total amount of transactions that have been entered into with Tess related parties and outstanding balances with Tess related parties as of and for the periods identified: Period Ended Services to Tess provided by (1) September 30, 2019 September 30, 2018 Powercases Inc. $ 231,328 $ 379,385 JLM Strategic Marketing $ — $ 267,304 1038088 Ontario Limited $ 45,062 $ 110,123 Payable to: September 30, 2019 December 31, 2018 Powercases Inc. $ — $ 37,250 JLM Strategic Marketing $ — $ 9,483 1038088 Ontario Limited $ — $ 52,053 (1) - 2019 amounts provided by related parties are up to the date of de-consolidation. |
Organization (Details)
Organization (Details) | Sep. 30, 2019 |
Kairos Global Technology, Inc [Member] | |
Number of computers acquired | 8,000 |
Liquidity and Financial Condi_2
Liquidity and Financial Condition (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||||||
May 24, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | Jan. 28, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Cash and cash equivalents | $ 15,162,781 | $ 1,607,085 | $ 225,390 | $ 41,651,965 | ||||
Digital currencies | 3,200,000 | |||||||
Working capital | 16,500,000 | |||||||
Stockholders' equity | (28,191,123) | (16,531,520) | $ (26,137,560) | (4,491,012) | $ (20,667,244) | $ (49,627,399) | ||
Accumulated deficit | 213,840,661 | $ 197,199,197 | ||||||
Total investment | $ 3,000,000 | |||||||
Proceeds from the sale of stock | 23,610,642 | |||||||
Common Stock [Member] | H.C. Wainwright [Member] | ||||||||
Maximum amount of sales shares | $ 100,000,000 | |||||||
Proceeds from the sale of stock | $ 22,700,000 | |||||||
Percentage of commission | 3.00% | |||||||
Weighted average price | $ 3.10 | |||||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | ||||||||
Debt instrument face amount | $ 3,358,333 |
Basis of presentation, summar_4
Basis of presentation, summary of significant accounting policies (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 27, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2019 | Jan. 28, 2019 | Dec. 31, 2018 | |
Conversion of notes into shares | 1,813,500 | 1,813,500 | ||||
Fair value of notes | $ 10,225,959 | |||||
Expected operating liabilities to be recorded from adoption of FASB ASU 2016-02 | $ 1,500,000 | |||||
Senior Secured Promissory Notes [Member] | ||||||
Conversion of notes into shares | 1,813,500 | |||||
Fair value of notes | $ 10,200,000 | |||||
Warrant issued | 1,908,144 | |||||
Senior Secured Convertible Promissory Notes [Member] | ||||||
Conversion of notes into shares | 1,813,500 | |||||
Fair value of notes | $ 3,900,000 | $ 10,200,000 | ||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | ||||||
Debt instrument face amount | $ 3,358,333 | |||||
Warrant issued | 1,908,144 |
Basis of presentation, summar_5
Basis of presentation, summary of significant accounting policies (Schedule of Antidilutive Securities) (Details) - shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 3,829,373 | 2,802,797 |
Warrants to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 3,574,257 | 1,671,113 |
Option to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 12,000 | 162,000 |
Escrow shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 200,000 | 200,000 |
Unvested restricted stock awards [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 38,917 | 665,188 |
Convertible Preferred Stock Series B [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Shares not included in the computation of EPS | 4,199 | 104,496 |
Digital Currencies (Summary of
Digital Currencies (Summary of Additional Information About Digital Currencies) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Indefinite-lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Beginning balance, January 1, 2019 | $ 706,625 | |
Revenue recognized from digital currencies mined | 5,563,952 | |
Mining pool operating fees | (111,278) | |
Purchase of miner equipment with digital currencies | (98,865) | |
Sale of digital currencies | (3,196,310) | |
Realized gain on sale of digital currencies | 665,218 | |
Impairment of digital currencies | (372,124) | |
Ending balance, September 30, 2019 | $ 3,157,218 |
Fair value measurements (Narrat
Fair value measurements (Narrative) (Details) - shares | 1 Months Ended | 9 Months Ended |
Jun. 27, 2019 | Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | ||
Conversion of notes into shares | 1,813,500 | 1,813,500 |
Fair value measurements (Schedu
Fair value measurements (Schedule of Weighted Average Unobservable Inputs) (Details) - Fair Value, Inputs, Level 3 [Member] | 1 Months Ended | |
Jun. 27, 2019 | Jan. 28, 2019 | |
Dividend yield [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 0% | 0% |
Expected Price volatility [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 119.9%-120.5% | 111.6% |
Risk free interest rate [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 2.23%-2.58% | 2.58% |
Expected term [Member] | Warrant [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 4 years, 10 months | 5 years |
Senior Secured Convertible Promissory Notes [Member] | Dividend yield [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 0% | 0% |
Senior Secured Convertible Promissory Notes [Member] | Expected Price volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 122.2%-127.1% | 119.5% |
Senior Secured Convertible Promissory Notes [Member] | Risk free interest rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 2.07%-2.44% | 2.60% |
Senior Secured Convertible Promissory Notes [Member] | Expected term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Weighted Average Unobservable Inputs | 1 year |
Fair value measurements (Sche_2
Fair value measurements (Schedule of Changes in Level 3 Liabilities Measured at Fair Value) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |
Mar. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Conversion of convertible notes to common stock | $ (10,225,959) | |||
Reclassification of warrant liability to equity | 5,438,660 | |||
Convertible Notes [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Issuance of senior secured convertible notes | $ 6,330,726 | |||
Issuance of warrants in connection with convertible notes | ||||
Balance Beginning | 6,330,726 | $ 7,975,308 | 6,330,726 | |
Change in fair value | 1,644,582 | 2,250,651 | ||
Conversion of convertible notes to common stock | (10,225,959) | |||
Reclassification of warrant liability to equity | ||||
Balance Ending | 7,975,308 | |||
Warrant [Member] | Fair Value, Inputs, Level 3 [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Issuance of senior secured convertible notes | ||||
Issuance of warrants in connection with convertible notes | 2,568,934 | |||
Balance Beginning | 2,568,934 | 5,322,162 | 2,568,934 | |
Change in fair value | 2,753,228 | 116,498 | ||
Conversion of convertible notes to common stock | ||||
Reclassification of warrant liability to equity | (5,438,660) | |||
Balance Ending | $ 5,322,162 |
Investment in Coinsquare (Detai
Investment in Coinsquare (Details) - Coinsquare [Member] - USD ($) | 1 Months Ended | |
Sep. 30, 2017 | Feb. 28, 2018 | |
Minority interest | $ 3,000,000 | |
Amount of Investment | $ 6,400,000 | |
Equity investment | 2,800,000 | |
Financing amount | 24,000,000 | |
Warrant acquired cash payment | $ 3,600,000 | |
Percentage owned | 12.00% |
Investment in Tess (Narrative)
Investment in Tess (Narrative) (Details) - Tess Inc [Member] - CAD ($) | Apr. 10, 2019 | Dec. 31, 2018 | Oct. 31, 2017 |
Business Acquisition [Line Items] | |||
Ownership acquired | 9.00% | 52.01% | |
Common Stock [Member] | |||
Business Acquisition [Line Items] | |||
Shares issued | 23,800,000 | 189,000 | |
Common Stock [Member] | Canada, Dollars [Member] | |||
Business Acquisition [Line Items] | |||
Shares issued, value | $ 1,200,000 | ||
Minimum [Member] | |||
Business Acquisition [Line Items] | |||
Ownership acquired | 52.01% | ||
Maximum [Member] | |||
Business Acquisition [Line Items] | |||
Ownership acquired | 50.20% |
Investment in Tess (Schedule of
Investment in Tess (Schedule of Fair value shares) (Details) - Tess Inc [Member] | Apr. 10, 2019USD ($)$ / sharesshares |
Tess shares held by Riot Blockchain, Inc. | shares | 2,708,333 |
Per share fair value | $ / shares | $ 0.03 |
Fair value of Tess shares held by Riot Blockchain, Inc. | $ | $ 90,174 |
Investment in Tess (Schedule _2
Investment in Tess (Schedule of Calculation of Gain on Deconsolidation of Tess) (Details) - USD ($) | Apr. 10, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 |
Current assets | $ 20,324,236 | $ 20,324,236 | $ 2,310,549 | |||
Less: | ||||||
Net liabilities | (4,794,179) | (4,794,179) | $ (9,369,316) | |||
Gain on deconsolidation on Tess | $ 1,138,787 | |||||
Tess Inc [Member] | ||||||
Current assets | $ 130,432 | |||||
Less: | ||||||
Accounts payable | 761,875 | |||||
Accrued expenses | 273,935 | |||||
Convertiable notes | 1,696,083 | |||||
Net liabilities | (2,601,461) | |||||
Non-controlling interest share | 1,552,848 | |||||
Sub-total | (1,048,613) | |||||
Less: Fair value of shares owned by Riot Blockchain | 90,174 | |||||
Gain on deconsolidation on Tess | $ (1,138,787) |
Investment in Verady (Details)
Investment in Verady (Details) - Convertible Note [Member] - Verady, LLC [Member] - USD ($) | 1 Months Ended | |
Nov. 30, 2017 | Sep. 30, 2019 | |
Investment in Convertible note | $ 200,000 | $ 220,000 |
Investment Maturity date | Dec. 31, 2022 | |
Investment Interest rate | 6.00% |
Notes and Other Obligations (De
Notes and Other Obligations (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||
Jun. 27, 2019USD ($)shares | Aug. 23, 2018USD ($) | Aug. 23, 2018CAD ($) | Mar. 28, 2018CAD ($) | Feb. 21, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)shares | Sep. 30, 2018USD ($) | Jan. 28, 2019USD ($)$ / sharesshares | Mar. 28, 2018$ / shares | |
Debt Instrument [Line Items] | |||||||||||
Conversion of notes into shares | shares | 1,813,500 | 1,813,500 | |||||||||
Fair value of conversion of shares | $ 10,225,959 | ||||||||||
Gain on extinguishment of debt | $ 34,899 | $ 842,925 | |||||||||
Restricted Stock [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Issuance of common stock | shares | 106,251 | ||||||||||
Senior Secured Convertible Promissory Notes [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate | 8.00% | ||||||||||
Fair value of notes | $ 6,330,726 | ||||||||||
Upfront costs and fees | $ 358,333 | ||||||||||
Conversion of notes into shares | shares | 1,813,500 | ||||||||||
Fair value of conversion of shares | $ 3,900,000 | $ 10,200,000 | |||||||||
Senior Secured Convertible Promissory Notes [Member] | Restricted Stock [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Issuance of common stock | shares | 150,000 | ||||||||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price | $ / shares | $ 2 | ||||||||||
Percentage of lowest volume-weighted adjusted price of shares | 80.00% | ||||||||||
Exercise price | $ / shares | $ 1.94 | ||||||||||
Debt instrument face amount | $ 3,358,333 | ||||||||||
Percentage amount of shares issuable upon full conversion of Notes | 300.00% | ||||||||||
Warrant issued | shares | 1,908,144 | ||||||||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of number of shares issuable | 19.99% | ||||||||||
Percentage of beneficial ownership of shares | 9.99% | ||||||||||
Senior Secured Convertible Promissory Notes [Member] | Investors [Member] | Minimum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of beneficial ownership of shares | 4.99% | ||||||||||
Senior Secured Convertible Promissory Notes [Member] | Private Financing [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument face amount | $ 3,000,000 | ||||||||||
Tess Inc [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Ownership acquired | 9.00% | 9.00% | |||||||||
Tess Inc [Member] | Convertible Note [Member] | Private Placement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Conversion price | $ / shares | $ 0.10 | ||||||||||
Tess Inc [Member] | Convertible Note [Member] | Canada, Dollars [Member] | Private Placement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from convertible debt held in escrow | $ 2,200,000 | ||||||||||
Tess Inc [Member] | Promissory Note [Member] | Private Placement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Notes Payable | $ 1,696,000 | ||||||||||
Cash released | $ 921,000 | ||||||||||
Interest rate | 5.00% | 5.00% | |||||||||
Proceeds from convertible debt held in escrow | $ 775,555 | ||||||||||
Tess Inc [Member] | Promissory Note [Member] | Canada, Dollars [Member] | Private Placement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from convertible debt held in escrow | $ 1,000,000 | ||||||||||
Tess Inc [Member] | Third party [Member] | Convertible Note [Member] | Canada, Dollars [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Proceeds from convertible debt held in escrow | $ 2,200,000 | ||||||||||
BMSS Purchase Agreement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument face amount | $ 1,340,000 | ||||||||||
Purchase cost | $ 8,500,000 | ||||||||||
Gain on extinguishment of debt | 390,000 | ||||||||||
One time settlement amount | $ 950,000 | ||||||||||
Settlement with certain creditors [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Gain on extinguishment of debt | $ 453,000 | ||||||||||
Value of liabilities settled with certain creditors | $ 2,082,000 | 2,082,000 | |||||||||
Cash payment made to settle liabilities with certain creditors | $ 1,629,000 |
Stockholders' equity (Details)
Stockholders' equity (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Class of Stock [Line Items] | ||
Proceeds from the sale of stock | $ 23,610,642 | |
Restricted Stock [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock | 106,251 | |
Restricted Stock [Member] | Consultant and Advisory Board Members [Member] | ||
Class of Stock [Line Items] | ||
Issuance of common stock | 48,500 | |
Series B Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Preferred stock converted into common shares | 8,801 | 1,353,505 |
Series B Preferred Stock [Member] | H.C. Wainwright [Member] | ||
Class of Stock [Line Items] | ||
Maximum amount of sales shares | $ 100,000,000 | |
Proceeds from the sale of stock | $ 22,700,000 | |
Percentage of commission | 3.00% | |
Weighted average price | $ 3.10 | |
Issuance of common stock | 7,608,785 |
Stock based compensation, opt_3
Stock based compensation, options and warrants (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 100,000 |
Unrecognized compensation cost, period | 10 months |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of restricted stock granted | $ 200,000 |
Stock based compensation, opt_4
Stock based compensation, options and warrants (Schedule of Recognized Stock-based Compensation) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 81,362 | $ 1,655,160 | $ 431,430 | $ 4,147,189 |
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 81,362 | 1,434,650 | 372,932 | 3,634,192 |
Stock options awards under the Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 220,510 | $ 58,498 | $ 512,997 |
Stock based compensation, opt_5
Stock based compensation, options and warrants (Schedule of Restricted Stock Activity) (Details) - Restricted Stock [Member] | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of shares | |
Unvested at January 1, 2019 | shares | 95,939 |
Vested | shares | (50,522) |
Granted | shares | 48,500 |
Forfeited | shares | (55,000) |
Unvested at September 30, 2019 | shares | 38,917 |
Weighted Average Grant Date Fair value | |
Unvested at January 1, 2019 | $ / shares | $ 12.49 |
Vested | $ / shares | 8.23 |
Granted | $ / shares | 3.78 |
Forfeited | $ / shares | 14.95 |
Unvested at September 30, 2019 | $ / shares | $ 3.68 |
Stock based compensation, opt_6
Stock based compensation, options and warrants (Schedule of Award Activity) (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Stock Incentive Plan [Member] | ||
Shares Underlying Options | ||
Outstanding at January 1, 2019 | 62,000 | |
Forfeited | (50,000) | |
Outstanding at September 30, 2019 | 12,000 | 62,000 |
Exercisable at September 30, 2019 | 12,000 | |
Weighted Average Exercise Price | ||
Outstanding at September 30, 2019 | $ 15.71 | |
Forfeited | 18.50 | |
Outstanding at September 30, 2019 | 4.09 | $ 15.71 |
Exercisable at September 30, 2019 | $ 4.09 | |
Weighted Average Remaining Contractual Term | ||
Outstanding at September 30, 2019 | 4 years | 8 years 2 months 12 days |
Exercisable at September 30, 2019 | 4 years | |
Aggregate Intrinsic Value | ||
Outstanding at September 30, 2019 | ||
Outstanding at September 30, 2019 | ||
Exercisable at September 30, 2019 | ||
Other common stock purchase options and warrants [Member] | ||
Shares Underlying Options | ||
Outstanding at January 1, 2019 | 1,671,113 | |
Granted | 1,908,144 | |
Forfeited | (5,000) | |
Outstanding at September 30, 2019 | 3,574,257 | 1,671,113 |
Exercisable at September 30, 2019 | 3,574,257 | |
Weighted Average Exercise Price | ||
Outstanding at September 30, 2019 | $ 39.47 | |
Granted | 1.94 | |
Forfeited | 7.90 | |
Outstanding at September 30, 2019 | 19.48 | $ 39.47 |
Exercisable at September 30, 2019 | $ 19.48 | |
Weighted Average Remaining Contractual Term | ||
Outstanding at September 30, 2019 | 3 years 1 month 6 days | 2 years |
Granted | 5 years 2 months 12 days | |
Exercisable at September 30, 2019 | 3 years 1 month 6 days | |
Aggregate Intrinsic Value | ||
Outstanding at September 30, 2019 | ||
Granted | ||
Outstanding at September 30, 2019 | ||
Exercisable at September 30, 2019 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
BDI Member | ||
Current liabilities: | ||
Accounts payable | $ 16,000 | $ 16,000 |
Discontinued Operations (Schedu
Discontinued Operations (Schedule of Operation and Assets and Liabilities Related to Discontinued Operations) (Details) - BDI [Member] | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Revenue | $ 137,000 |
Cost of revenue | 41,000 |
Gross margin | 96,000 |
Operating expenses | |
Operating income | 96,000 |
Income from discontinued operations, net of tax | $ 96,000 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Apr. 09, 2018USD ($)ft² | Mar. 26, 2018USD ($) | Feb. 27, 2018USD ($)ft² | |
Lessee, Lease, Description [Line Items] | |||||||
Operating lease liabilities | $ 900,000 | $ 900,000 | |||||
Right of use assets | 900,000 | 900,000 | |||||
Rent expense | 1,300,000 | $ 1,900,000 | 4,200,000 | $ 3,700,000 | |||
Office Space - Fort Lauderdale, Florida [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Area of lease | ft² | 1,694 | ||||||
Base rent per month | $ 7,000 | ||||||
Lease term | 39 months | ||||||
Lease renewal term | 5 years | ||||||
Kairos Global Technology, Inc [Member] | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Area of lease | ft² | 107,600 | ||||||
Base rent per month | 235,000 | 235,000 | $ 664,760 | $ 223,800 | |||
Monthly base rent owed for December 2018 | 230,000 | 230,000 | |||||
Monthly base rent owed for all remaining periods thereafter for the duration of the lease, including any renewals | $ 190,000 | $ 190,000 |
Leases (Schedule of Operating L
Leases (Schedule of Operating Leases) (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Lease cost | ||
Operating lease cost | $ 592,593 | $ 1,793,778 |
Variable lease cost | 711,113 | 2,348,448 |
Operating lease expense | 1,303,706 | 4,142,226 |
Short-term lease rent expense | 4,620 | 13,860 |
Total rent expense | 1,308,326 | 4,156,086 |
Other information | ||
Operating cash flows from operating leases | 584,395 | 1,792,625 |
Right of use assets exchanged for new operating lease liabilities | $ 558,314 | $ 2,664,126 |
Weighted-average remaining lease term - operating leases | 7 months 6 days | 7 months 6 days |
Weighted-average discount rate - operating leases | 10.00% | 10.00% |
Leases (Schedule of Maturities
Leases (Schedule of Maturities of Operating Lease Liabilities) (Details) | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
For the three months ended December 31,2019 | $ 584,395 |
For the year ended December 31, 2020 | 343,731 |
For the year ended December 31, 2021 | 35,040 |
Total operating lease obligation | 963,166 |
Less present value discount | (24,618) |
Operating lease liabilities | $ 938,548 |
Tess Related Party Transactio_3
Tess Related Party Transactions (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Tess [Member] | ||
Related Party Transaction [Line Items] | ||
Key management personnel salaries | $ 260,000 | $ 180,000 |
Tess Related Party Transactio_4
Tess Related Party Transactions (Schedule of Tess Related Party Transactions) (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | ||
Powercases Inc [Member] | ||||
Related Party Transaction [Line Items] | ||||
Services to Tess | [1] | $ 231,328 | $ 379,385 | |
Payable to | $ 37,250 | |||
JLM Strategic Marketing [Member] | ||||
Related Party Transaction [Line Items] | ||||
Services to Tess | [1] | 267,304 | ||
Payable to | 9,483 | |||
1038088 Ontario Limited [Member] | ||||
Related Party Transaction [Line Items] | ||||
Services to Tess | [1] | 45,062 | $ 110,123 | |
Payable to | $ 52,053 | |||
[1] | - 2019 amounts provided by related parties are up to the date of de-consolidation. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Nov. 08, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | |
Subsequent Event [Line Items] | |||
Proceeds from the sale of stock | $ 23,610,642 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Shares of restricted common stock related to fully vested shares of restricted stock issued under 2017 Equity Incentive Plan | 30,000 | ||
Subsequent Event [Member] | H.C. Wainwright [Member] | |||
Subsequent Event [Line Items] | |||
Proceeds from the sale of stock | $ 859,000 | ||
Sale of common stock | 494,820 |