Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 15, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | LMFA | ||
Entity Registrant Name | LM FUNDING AMERICA, INC. | ||
Entity Central Index Key | 0001640384 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 3,124,961 | ||
Entity Public Float | $ 1,718,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash | $ 3,520,753 | $ 590,394 |
Finance receivables: | ||
Original product (Note 2) | 425,012 | 637,937 |
Special product - New Neighbor Guaranty program, net of allowance for credit losses of (Note 3) | 237,043 | 339,471 |
Due from related party (Note 10) | 25,507 | |
Prepaid expenses and other assets | 155,420 | 101,339 |
Fixed assets, net | 33,818 | 69,505 |
Real estate assets owned (Note 5) | 122,604 | 196,707 |
Other assets | 32,036 | 32,964 |
Other investments | 1,507,375 | |
Total assets | 6,059,568 | 1,968,317 |
Liabilities and stockholders' equity | ||
Notes payable, net of unamortized debt issuance costs (Note 6) | 42,875 | 39,028 |
Accounts payable and accrued expenses | 188,354 | 477,953 |
Accrued loss litigation settlement | 100,000 | 505,000 |
Other liabilities and obligations | 19,690 | 49,353 |
Total liabilities | 250,919 | 1,071,334 |
Stockholders' equity (Note 9) | ||
Common stock, par value $.001; 30,000,000 shares authorized as of December 31, 2018 and 10,000,000 shares authorized as of December 31, 2017; 3,124,961 and 625,318 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively | 3,125 | 625 |
Additional paid-in capital | 17,295,408 | 11,914,083 |
Accumulated deficit | (11,489,884) | (11,017,725) |
Total stockholders' equity | 5,808,649 | 896,983 |
Total liabilities and stockholders’ equity | $ 6,059,568 | $ 1,968,317 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 30,000,000 | 10,000,000 |
Common stock, shares issued | 3,124,961 | 625,318 |
Common stock, shares outstanding | 3,124,961 | 625,318 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues | ||
Interest on delinquent association fees | $ 2,084,287 | $ 2,935,517 |
Administrative and late fees | 230,756 | 259,653 |
Recoveries in excess of cost - special product | 118,540 | 172,884 |
Underwriting fees and other revenues | 246,904 | 286,435 |
Rental revenue | 709,050 | 737,490 |
Total revenues | 3,389,537 | 4,391,979 |
Operating expenses | ||
Professional fees | 1,331,482 | 2,459,888 |
Settlement costs with associations | 40,027 | 269,576 |
Selling, general and administrative | 323,030 | 810,281 |
Real estate management and disposal | 627,384 | 551,708 |
Depreciation and amortization | 68,263 | 95,447 |
Collection costs | 19,025 | 228,763 |
Bad debt allowance - related party | 1,408,589 | |
Provision for credit losses | 581 | 141,286 |
Other operating | 17,964 | 10,364 |
Total operating expenses | 3,801,885 | 7,863,732 |
Operating loss | (412,348) | (3,471,753) |
(Gain) Loss on litigation | (405,000) | 505,000 |
Loss on settlement of debt exchange | 604,779 | |
Interest expense | 464,811 | 614,111 |
Total other expenses | 59,811 | 1,723,890 |
Loss before income taxes | (472,159) | (5,195,643) |
Income tax benefit | 3,431,536 | |
Net loss to common stockholders | $ (472,159) | $ (8,627,179) |
Loss per common share attributable to the stockholders of LM Funding America, Inc. | ||
Basic | $ (0.47) | $ (25.68) |
Diluted | $ (0.47) | $ (25.68) |
Weighted average number of common shares outstanding | ||
Basic | 996,710 | 335,997 |
Diluted | 996,710 | 335,997 |
Service [Member] | ||
Operating expenses | ||
Staff costs & payroll | $ 1,374,129 | $ 1,887,830 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2016 | $ 4,169,458 | $ 330 | $ 6,559,674 | $ (2,390,546) |
Balance, shares at Dec. 31, 2016 | 330,000 | |||
Stock issuance for settlement of debt | 5,325,639 | $ 295 | 5,325,344 | |
Stock issuance for settlement of debt, shares | 295,318 | |||
Stock option expense | 29,065 | 29,065 | ||
Net loss | (8,627,179) | (8,627,179) | ||
Balance at Dec. 31, 2017 | 896,983 | $ 625 | 11,914,083 | (11,017,725) |
Balance, shares at Dec. 31, 2017 | 625,318 | |||
Stock issuance for cash | 5,206,273 | $ 2,500 | 5,203,773 | |
Stock issuance for cash, shares | 2,500,000 | |||
Stock option expense | 24,770 | 24,770 | ||
Warrants issued with debt | 154,676 | 154,676 | ||
Purchase of fractional common shares | (1,894) | (1,894) | ||
Purchase of fractional common shares, shares | (357) | |||
Net loss | (472,159) | (472,159) | ||
Balance at Dec. 31, 2018 | $ 5,808,649 | $ 3,125 | $ 17,295,408 | $ (11,489,884) |
Balance, shares at Dec. 31, 2018 | 3,124,961 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (472,159) | $ (8,627,179) |
Adjustments to reconcile net loss to cash used in operating activities | ||
Depreciation | 68,263 | 95,447 |
Warrants issued with debt amortization | 154,676 | |
Stock compensation | 24,770 | 29,065 |
Amortization of debt issuance costs | 291,760 | 99,396 |
Interest settled with common shares | 180,585 | |
Reserve for uncollectible related party receivables | 1,408,589 | |
Credit loss reserves, net | 88,571 | |
Loss settlement of debt | 604,779 | |
(Gain) loss on litigation | (405,000) | 505,000 |
Write-off of deferred tax asset, net | 3,431,536 | |
Interest income | (7,375) | |
Change in operating assets and liabilities: | ||
Increase in prepaid expenses and other assets | 31,517 | 147,491 |
Advances (repayments) to related party | (25,507) | 252,771 |
Decrease in accounts payable and accrued expenses | (389,599) | (15,735) |
Decrease in other liabilities and obligations | (29,663) | (10,814) |
Net cash used in operating activities | (758,317) | (1,810,498) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (8,673) | |
Investment in note receivable | (1,500,000) | |
Payments for real estate assets owned | 41,527 | 491,677 |
Net cash (used in) provided by investing activities | (1,143,120) | 891,740 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of common stock, net of issuance cost | 5,206,273 | |
Proceeds from borrowings | 500,000 | |
Debt issuance costs | (291,760) | |
Principal repayments | (580,823) | (759,028) |
Purchase of fractional common shares | (1,894) | |
Net cash provided by (used in) financing activities | 4,831,796 | (759,028) |
NET INCREASE (DECREASE) IN CASH | 2,930,359 | (1,677,786) |
CASH - BEGINNING OF YEAR | 590,394 | 2,268,180 |
CASH - END OF YEAR | 3,520,753 | 590,394 |
SUPPLEMENTAL DISCLOSURES OF CASHFLOW INFORMATION | ||
Cash paid for interest | 29,401 | 334,962 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Debt discount on issuance of warrants | 154,676 | |
Insurance financing | 84,670 | 78,056 |
Original Product [Member] | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net collections of finance receivables | 212,925 | 256,610 |
Special Product [Member] | ||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Net collections of finance receivables | $ 102,428 | $ 152,126 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1. Summary of Significant Accounting Policies Nature of Operations LM Funding America, Inc. (“LMFA” or the “Company”) was formed as a Delaware corporation on April 20, 2015. LMFA was formed for the purpose of completing a public offering and related transactions in order to carry on the business of LM Funding, LLC and its subsidiaries (the “Predecessor”). LMFA is the sole member of LM Funding, LLC and operates and controls all of its businesses and affairs. LM Funding, LLC a Florida limited liability company organized in January 2008 under the terms of an Operating Agreement dated effective January 8, 2008 as amended, had two members: BRR Holding, LLC and CGR 63, LLC. The members contributed their equity interest to LMFA prior to the closing of its initial public offering. The Company acquired IIU, Inc. on January 15, 2019 (IIU, Inc) global medical insurance products for international travelers, specializing in policies covering high-risk destinations, emerging markets and foreign travelers coming to the United States. All policies are fully underwritten with no claim risk remaining with IIU Inc. We are a diversified business with two focuses: • specialty finance company that provides funding to nonprofit community associations primarily located in the state of Florida. We offer incorporated nonprofit community associations, which we refer to as “Associations,” a variety of financial products customized to each Association’s financial needs. Our original product offering consists of providing funding to Associations by purchasing their rights under delinquent accounts that are selected by the Associations arising from unpaid Association assessments. Historically, we provided funding against such delinquent accounts, which we refer to as “Accounts,” in exchange for a portion of the proceeds collected by the Associations from the account debtors on the Accounts. We have started purchasing Accounts on varying terms tailored to suit each Association’s financial needs, including under our New Neighbor Guaranty™ program. • specialty health insurance broker (IIU, Inc) that was purchased o n January 15, 2019, which provides Specialty Finance The Company has a specialty finance company that provides funding principally to community associations that are almost exclusively located in Florida. The business of the Company is conducted pursuant to relevant state statutes (the “Statutes”), principally Florida Statute 718.116. The Statutes provide each community association lien rights to secure payment from unit owners (property owners) for assessments, interest, administrative late fees, reasonable attorneys’ fees, and collection costs. In addition, the lien rights granted under the Statutes are given a higher priority (a “Super Lien”) than all other lien holders except property tax liens. The Company provides funding to associations for their delinquent assessments from property owners in exchange for an assignment of the association’s right to collect proceeds pursuant to the Statutes. The Company derives its revenues from the proceeds of association collections. The Statutes specify that the rate of interest an association (or its assignor) may charge on delinquent assessments is equal to the rate set forth in the association’s declaration or bylaws. In Florida if a rate is not specified, the statutory rate is equal to 18% but may not exceed the maximum rate allowed by law. Similarly, the Statutes in Florida also stipulate that administrative late fees cannot be charged on delinquent assessments unless so provided by the association’s declaration or bylaws and may not exceed the greater of $25 or 5% of each delinquent assessment. The Statutes limit the liability of a first mortgage holder for unpaid assessments and related charges and fees (as set forth above) in the event of title transfer by foreclosure or acceptance of deed in lieu of foreclosure. This liability is limited to the lesser of twelve months of regular periodic assessments or one percent of the original mortgage debt on the unit (the “Super Lien Amount”). Specialty Health Insurance Our subsidiary IIU Inc. (“IIU”) through its wholly owned company Wallach and Company (“Wallach”) offers health insurance, travel insurance and other travel services to: • United States citizens and residents traveling abroad • Non United States citizens or residents who travel to the United States These services are typically sold through a policy offered by Wallach and fully underwritten by a third party insurance company. The policies offered include: • HealthCare Abroad - Short term medical insurance, medical evacuation and international assistance for Americans traveling overseas. There is an age limit of 84 years old. • HealthCAre Global – up to 6 months coverage for Americans traveling abroad and foreign nationals traveling outside their home countries to destinations other than the United States. There is an age limit of 70 years old. • HealthCare America – up to 90 days coverage for foreign nationals visiting the United States. There is an age limit of 70 years old. • HealthCare International – International medical insurance & assistance for persons living outside their home country. There is an age limit of 70 years old. • HealthCare War – up to 6 months coverage for Americans traveling abroad and foreign nationals traveling outside their home countries to identified war risk areas. There is an age limit of 70 years old. Principles of Consolidation The condensed consolidated financial statements include the accounts of LMFA and its wholly-owned subsidiaries: LM Funding, LLC; LMF October 2010 Fund, LLC; REO Management Holdings, LLC (including all 100% owned subsidiary limited liability companies); LM Funding of Colorado, LLC; LM Funding of Washington, LLC; LM Funding of Illinois, LLC; and LMF SPE #2, LLC and various single purpose limited liability corporations owned by REO Management Holdings, LLC which own various properties. All significant intercompany balances have been eliminated in consolidation. Basis of Presentation The consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the evaluation of any probable losses on amounts funded under the Company’s New Neighbor Guaranty Revenue Recognition Accounting Standards Codification (“ASC”) 605-10-25-1 of the Financial Accounting Standards Board (“FASB”) states revenues are realized or realizable when related assets received or held are readily convertible into known amounts of cash. In those cases where there is no reasonable basis for estimating the “known amount” of cash to be collected, the cash basis or cost recovery method of recognizing revenues may be used. The Company provides funding to community associations by purchasing their rights under delinquent accounts from unpaid assessments due from property owners (the “accounts”). Collections on the accounts may vary greatly in both the timing and amount ultimately recovered compared with the total revenues earned on the accounts because of a variety of economic and social factors affecting the real estate environment in general. The Company has determined that the known amount of cash to be realized or realizable on its revenue generating activities cannot be reasonably estimated and as such, classifies its finance receivables as nonaccrual and recognizes revenues in the accompanying statements of income on the cash basis or cost recovery method in accordance with ASC 310-10, . The Company recognized revenue in 2017 pursuant to ASC 605 while recognizing revenue in 2018 pursuant to ASC 606. Accounting Standards Codification (“ASC”) 606 of the Financial Accounting Standards Board (“FASB”) states an entity needs to conclude at the inception of the contract that collectability of the consideration to which it will be entitled in exchange for the goods and services that will be transferred to the customer is probable. That is, in some circumstances, an entity may not need to assess its ability to collect all of the consideration in the contract. The Company provides funding to community associations by purchasing their rights under delinquent accounts from unpaid assessments due from property owners (the “accounts”). Collections on the accounts may vary greatly in both the timing and amount ultimately recovered compared with the total revenues earned on the accounts because of a variety of economic and social factors affecting the real estate environment in general. The Company’s contracts with its customers have very specific performance obligations. The Company has determined that the known amount of cash to be realized or realizable on its revenue generating activities cannot be reasonably estimated. The Company determined rental income from leasing arrangements is specifically excluded from the standard. The Company analyzed its remaining revenue streams and concluded there were no changes in revenue recognition with the adoption of the new standard. Under both ASC 605 and ASC 606, the Company applies the cash basis method to its original product and the cost recovery method to its special product as follows: Finance Receivables—Original Product : Under the Company’s original product, delinquent assessments are funded only up to the Super Lien Amount as discussed above. Recoverability of funded amounts is generally assured because of the protection of the Super Lien Amount. As such, payments by unit owners on the Company’s original product are recorded to income when received in accordance with the provisions of the Florida Statute (718.116(3)) and the provisions of the purchase agreements entered into between the Company and community associations. Those provisions require that all payments be applied in the following order: first to interest, then to late fees, then to costs of collection, then to legal fees expended by the Company and then to assessments owed. In accordance with the cash basis method of recognizing revenue and the provisions of the statute, the Company records revenues for interest and late fees when cash is received. In the event the Company determines the ultimate collectability of amounts funded under its original product are in doubt, payments are applied to first reduce the funded or principal amount. Finance Receivables—Special Product (New Neighbor Guaranty program) : During 2012, the Company began offering associations an alternative product under the program where the Company will fund amounts in excess of the Super Lien Amount. Under this special product, the Company purchases substantially all of the delinquent assessments owed to the association, in addition to all accrued interest and late fees, in exchange for payment by the Company of (i) a negotiated amount or (ii) on a going forward basis, all monthly assessments due for a period up to 48 months. Under these arrangements, the Company considers the collection of amounts funded is not assured and under the cost recovery method, cash collected is applied to first reduce the carrying value of the funded or principal amount with any remaining proceeds applied next to interest, late fees, legal fees, collection costs and any amounts due to the community association. Any excess proceeds still remaining are recognized as revenues. If the future proceeds collected are lower than the Company’s funded or principal amount, then a loss is recognized. Cash The Company maintains cash balances at several financial institutions that are insured under the Federal Deposit Insurance Corporation’s (“FDIC”) Transition Account Guarantee Program. Balances with the financial institutions may exceed federally insured limits. Finance Receivables Finance receivables are recorded at the amount funded or cost (by unit). The Company evaluates its finance receivables at each period end for losses that are considered probable and can be reasonably estimated in accordance with ASC 450-20. As discussed above, recoverability of funded amounts under the Company’s original product is generally assured because of the protection of the Super Lien Amount. However, the Company did accrue at December 31, 2017 an allowance for credit losses for this program of $194,000 and recorded a provision for credit losses of $141,286 (net of deferred origination fees of $52,714 recognized prior to 2015 and reversed in the current year). Under the New Neighbor Guaranty The Company will charge any receivable against the allowance for credit losses when management believes the uncollectibility of the receivable is confirmed. The Company considers writing off a receivable when (i) a first mortgage holder who names the association in a foreclosure suit takes title and satisfies an estoppel letter for amounts owed which are less than amounts the Company funded to the association; (ii) a tax deed is issued with insufficient excess proceeds to pay amounts the Company funded to the association; (iii) an association settles an account for less than amounts the Company funded to the association or (iv) the association terminates its relationship with the Company’s designated legal counsel. Upon the occurrence of any of these events, the Company evaluates the potential recovery via a deficiency judgment against the prior owner and the ability to collect upon the deficiency judgment within the statute of limitations period or whether the deficiency judgment can be sold. If the Company determines that collection through a deficiency judgment or sale of a deficiency judgment is not feasible, the Company writes off the unrecoverable receivable amount. Any losses greater than the recorded allowance will be recognized as expenses. Under the Company’s revenue recognition policies, all finance receivables (original product and special product) are classified as nonaccrual. Investment in Note Receivable On November 2, 2018, the Company entered into a Securities Purchase Agreement with IIU Inc. (“IIU”), pursuant to which IIU issued to the Company a Senior Convertible Promissory Note (“IIU Note”) in the original principal amount of $1,500,000 in exchange for a purchase price of $1,500,000. The maturity date of the Note is 360 dates after the date of issuance (subject to acceleration upon an event of default). The Note carries a 3.0% interest rate, with accrued but unpaid interest being payable on the Note’s maturity date. The IIU Note allows the Company the right on or after the maturity date to convert any unpaid principal and accrued and unpaid interest of the IIU Note into shares of IIU based on a conversion amount which is the fair value of the common shares of IIU at the time. The Company subsequently purchased 100 Real Estate Assets Owned In the event collection of a delinquent assessment results in a unit being sold in a foreclosure auction, the Company has the right to bid (on behalf of the community association) for the delinquent unit as attorney in fact, applying any amounts owed for the delinquent assessment to the foreclosure price as well as any additional funds that the Company, in its sole discretion, decides to pay. If a delinquent unit becomes owned by the community association by acquiring title through an association lien foreclosure auction, by accepting a deed-in-lieu of foreclosure, or by any other way, the Company in its sole discretion may direct the community association to quitclaim title of the unit to the Company. Properties quitclaimed to the Company are in most cases acquired subject to a first mortgage or other liens, and are recognized in the accompanying consolidated balance sheets solely at costs incurred by the Company in excess of original funding. At times, the Company will acquire properties through foreclosure actions free and clear of any mortgages or liens. In these cases, the Company records the estimated fair value of the properties in accordance with ASC 820-10, Fair Value Measurements The Company capitalizes costs incurred to acquire real estate owned properties and any costs incurred to get the units in a condition to be rented. These costs include, but are not limited to, renovation/rehabilitation costs, legal costs, and delinquent taxes. These costs are depreciated over the estimated minimum time period the Company expects to maintain possession of the units. Costs incurred for unencumbered units are depreciated over 20 years and costs for units subject to a first mortgage are depreciated over 3 years. As of December 31, 2018 and 2017, capitalized real estate costs, net of accumulated depreciation, were $122,604 and $196,707, respectively. During the years ended December 31, 2018 and 2017, depreciation expense was $45,577 and $46,342, respectively. If the Company elects to take a quitclaim title to a unit or property held for sale, the Company is responsible to pay all future assessments on a current basis, until a change of ownership occurs. The community association must allow the Company to lease or sell the unit to satisfy obligations for delinquent assessments of the original debt. All proceeds collected from any sale of the unit shall be first applied to all amounts due the Company plus any additional funds paid by the Company to purchase the unit, if applicable. Rental revenues and sales proceeds related to real estate assets held for sale are recognized when earned and realizable. Expenditures for current assessments owed to associations, repairs and maintenance, utilities, etc. are expensed when incurred. If the community association elects (prior to the Company obtaining title through its own election) to maintain ownership and not quitclaim title to the Company, the community association must pay the Company all interest, late fees, collection costs, and legal fees expended, plus the original funding on the unit, which have accrued according to the purchase agreement entered into by the community association and the Company. In this event, the unit will be reassigned to the community association. Fixed Assets The Company capitalizes all acquisitions of fixed assets in excess of $500. Fixed assets are stated at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the assets. Fixed assets are comprised of furniture, computer and office equipment with an assigned useful life of 3 to 5 years. Fixed assets also includes capitalized software costs. Capitalized software costs include costs to develop software to be used solely to meet the Company’s internal needs, consist of employee salaries and benefits and fees paid to outside consultants during the application development stage, and are amortized over their estimated useful life of 5 years. As of December 31, 2018 and December 31, 2017, capitalized software costs, net of accumulated amortization, was $21,951 and $45,210, respectively. Amortization expense for capitalized software costs for the periods ended December 31, 2018 and December 31, 2017 was $23,259. Debt Issue Costs The Company capitalizes all debt issue costs and amortizes them on a method that approximates the effective interest method over the remaining term of the note payable. Unamortized debt issue costs of $0 at December 31, 2018 and $0 at December 31, 2017 are presented in the accompanying condensed consolidated balance sheets as a direct deduction from the carrying amount of that debt liability in accordance with Accounting Standards Update (“ASU”) 2015-03. The Company incurred $291,760 of debt issue costs during the year ended December 31, 2018. Debt Discount On April 2, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with a New York-based family office (“Investor”), which was subsequently amended (see Note 13. Subsequent Events) The 40,000 warrants were valued on the grant date at approximately $3.87 per warrant or a total relative fair value of $154,676 using a Black-Scholes option pricing model with the following assumptions: stock price of $7.40 per share (based on the quoted trading price on the date of grant), volatility of 100.6%, expected term of 5 years, and a risk-free interest rate of 2.55%. The relative fair value of the warrants ($154,676) was treated as a debt discount that is being amortized over 6 months. The amortization of the discount is recognized as interest expense of which $154,676 was recognized for the year ended December 31, 2018. Settlement Costs with Associations Community associations working with the Company will at times incur costs in connection with litigation initiated by the Company against property owners and or mortgage holders. These costs include settlement agreements whereby the community association agrees to pay some monetary compensation to the opposing party or judgments against the community associations for fees of opposing legal counsel or other damages awarded by the courts. The Company indemnifies the community association for these costs pursuant to the provisions of the agreement between the Company and the community association. Costs incurred by the Company for these indemnification obligations for the year ended December 31, 2018 and 2017 were $40,027 and $269,576, respectively. The Company does not limit its indemnification based on amounts ultimately collected from property owners. Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes resulting primarily from the tax effects of temporary differences between financial and income tax reporting. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-30-5, Income Taxes Prior to the initial public offering in October 2015, the taxable earnings of the Predecessor were included in the tax returns of its members (separate limited liability companies) and taxed depending on personal tax situations. In connection with the initial public offering, the members contributed ownership interests to the Company (a newly form C-Corporation) and all earnings subsequent to that date (October 23, 2015) are subject to taxes and reflected in the Company’s consolidated financial statements. Loss Per Share Basic loss per share is calculated as net loss to common stockholders divided by the weighted average number of common shares outstanding during the period. The Company issued 2,500,000 shares at various times during the month of November 2018 and has weighted average these new shares in calculating loss per share. On October 15, 2018, the Company effected a common share consolidation (“Reverse Stock Split”) by means of a one-for-ten (1:10) reverse split of its outstanding common stock, par value $0.001 per share which resulted in a decrease in outstanding common stock to 625,318 shares. The Reverse Stock Split became effective, on October 16, 2018 and the Company’s common stock began trading on The Nasdaq Global Market on a split-adjusted basis on October 16, 2018. The Company has restated all share amounts to reflect the Reverse Stock Split. Diluted loss per share for the period equals basic loss per share as the effect of any stock based compensation awards or stock warrants would be anti-dilutive. The anti-dilutive stock based compensation awards consisted of: For the years ended December 31 2018 2017 Stock Options 19,300 11,290 Stock Warrants – number of shares to purchase 2,763,387 120,000 Stock-Based Compensation The Company records all equity-based incentive grants to employees and non-employee members of the Company’s Board of Directors in operating expenses in the Company’s Consolidated Statements of Operations based on their fair values determined on the date of grant. Stock-based compensation expense, reduced for estimated forfeitures, is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the outstanding equity awards. Contingencies The Company accrues for contingent obligations, including estimated legal costs, when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, the Company reassesses its position and makes appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal and other regulatory matters. Fair Value of Financial Instruments FASB ASC 825-10, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet. The Company engages a third party valuation firm to assist in estimating the fair value of its finance receivables. See Note 11. Related Party ASC 850 - Related Party Disclosures requires disclosure of related party transactions and certain common control relationships. The Company disclosures related party transactions and such transactions are approved by the board of directors. See Note 10. Risks and Uncertainties Funding amounts are secured by a priority lien position provided under Florida law (see discussion above regarding Florida Statute 718.116). However, in the event the first mortgage holder takes title to the property, the amount payable by the mortgagee to satisfy the priority lien is capped under this same statute and would generally only be sufficient to reimburse the Company for funding amounts noted above for delinquent assessments. Amounts paid by the mortgagee would not generally reimburse the Company for interest, administrative late fees and collection costs. Even though the Company does not recognize these charges as revenues until collected, its business model and long-term viability is dependent on its ability to collect these charges. In the event a delinquent unit owner files for bankruptcy protection, the Company may at its option be reimbursed by the association for the amounts funded (i.e., purchase price) and all collection rights are re-assigned to the association. Non-cash Financing and Investing Activities During the year ended December 31, 2018 and 2017, the Company acquired unencumbered title to certain properties as a result of foreclosure proceedings. Properties were recorded at fair value less cost to dispose of approximately $0 and $0, respectively. The fair value of these properties was first applied to recover the Company’s initial investment with any remaining proceeds applied to interest, late fees, and other amounts owed by the property owner. Credit Losses – In June 2016, the FASB issued ASU 2016-13- which establishes a new approach for credit impairment based on an expected loss model rather than an incurred loss model. The standard requires the consideration of all available relevant information when estimating expected credit losses, including past events, current conditions and forecasts and their implications for expected credit losses. The guidance is effective January 1, 2020 with a one-year early adoption permitted. The Company is evaluating the impact of the new guidance. Settlement of Debt – for the year ended December 31, 2017 the Company settled $4,721,000 of principal, accrued interest and other charges by issuing 295,318 common shares. The Company settled $180,585 of accrued interest through the issuance of shares. Financing of Insurance Premium – the Company financed the purchase of various insurance policies during the year ended December 31, 2018 and 2017 using a $85,000 and $78,000 financing agreement. Recently Adopted Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting," which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting pursuant to Topic 718. ASU 2017-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The amendments in this update are required to be applied prospectively to an award modified on or after the adoption date. This standard becomes effective for the Company as of January 1, 2018. The impact this standard will have on the Company's consolidated financial statements and related disclosures will be dependent on the terms and conditions of any modifications made to share-based awards after January 1, 2018. The Company did not have any modifications during 2018. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." This ASU creates a single, comprehensive revenue recognition model for all contracts with customers. The model is based on changes in contract assets (rights to receive consideration) and liabilities (obligations to provide a good or service). Revenue will be recognized based on the satisfaction of performance obligations, which occurs when control of a good or service transfers to a customer and enhanced disclosures will be required regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. Either a retrospective or cumulative effect transition method, referred to as the modified retrospective method, is permitted. The impact from the adoption of this standard was immaterial to the consolidated financial statements for the full fiscal year 2018. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective method but did not recognize any cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to recognize right-of-use assets and lease liability, initially measured at present value of the lease payments, on its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. ASU 2016-02 requires a modified retrospective transition approach for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, and provides certain practical expedients that companies may elect including those contained in ASU 2018-01, "Leases (Topic 842): Lease Easement Practical Expedient for Transition to Topic 842". This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted. The Company has evaluated the impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures and does not expect any significant impact to the Company. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses In June 2018, the FASB issued ASU No. 2018-07 " Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting". The standard simplified the accounting for share-based payments granted to nonemployees for goods and services, therefore guidance on such payments to nonemployees would be mostly aligned with the requirements for share-based payments granted to employees. ASU 2018-07 will be effective for us beginning October 1, 2019, but early adoption is permitted (but no earlier than the adoption date of Topic 606). We are currently evaluating the impact of implementation of this standard on our financial statements. Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact to the Company. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Finance Receivables - Original
Finance Receivables - Original Product | 12 Months Ended |
Dec. 31, 2018 | |
Original Product [Member] | |
Finance Receivables | Note 2. Finance Receivables – Original Product The Company’s original funding product provides financing to community associations only up to the secured or “Super Lien Amount” as discussed in Note 1. Finance receivables for the original product as of December 31, based on the year of funding are approximately as follows: 2018 2017 Funded during the current year $ 79,000 $ 118,000 1-2 years outstanding 35,000 38,000 2-3 years outstanding 18,000 12,000 3-4 years outstanding 7,000 24,000 Greater than 4 years outstanding 411,000 640,000 550,000 832,000 Reserve for credit losses (125,000 ) (194,000 ) $ 425,000 $ 638,000 Number of active units with delinquent assessments 826 1,162 Amount of outstanding interest and late fees on active units $ 11,268,000 $ 14,600,000 |
Finance Receivables - Special P
Finance Receivables - Special Product (New Neighbor Guaranty program) | 12 Months Ended |
Dec. 31, 2018 | |
Special Product (New Neighbor Guaranty Program) [Member] | |
Accounts Notes And Loans Receivable [Line Items] | |
Finance Receivables | Note 3. Finance Receivables – Special Product (New Neighbor Guaranty program) The Company typically funds amounts equal to or less than the “Super Lien Amount”. During 2012 the Company began offering Associations an alternative product under the New Neighbor Guaranty program where the Company funds amounts in excess of the “Super Lien Amount”. Under this special product, the Company purchases substantially all of the outstanding past due assessments due from delinquent property owners, in addition to all interest, late fees and other charges in exchange for the Company’s commitment to pay monthly assessments on a going forward basis up to 48 months. As of December 31, 2018, maximum future contingent payments under these arrangements was approximately $249,000. In prior years, the Company had mitigated the credit risk for these transactions by insuring the payment of a portion of uncollected assessments paid by the Company during 2016 and 2015, (See Note 4 below). Delinquent assessments and accrued charges under these arrangements as of December 31, are as follows: 2018 2017 Finance receivables, net $ 237,000 $ 339,000 Delinquent assessments 707,000 1,200,000 Accrued interest and late fees 465,000 728,000 Number of active units with delinquent assessments 58 97 |
New Neighbor Guaranty (NNG) All
New Neighbor Guaranty (NNG) Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
New Neighbor Guaranty (NNG) Allowance for Credit Losses | Note 4. New Neighbor Guaranty (NNG) Allowance for Credit Losses Allowance for credit losses are recorded for losses that are considered “probable” and can be “reasonably estimated” in accordance with ASC 450-20. Recoverability of the Company’s Original Product is generally assured because of the protection of the Super Lien under Florida statute and as such no allowance is recorded. Credit losses on the NNG product were estimated by the Company and had a remaining balance of approximately $41,000 and $51,000 as of December 31, 2018 and 2017, respectively. |
Real Estate Assets Owned
Real Estate Assets Owned | 12 Months Ended |
Dec. 31, 2018 | |
Real Estate [Abstract] | |
Real Estate Assets Owned | Note 5. Real Estate Assets Owned Real estate assets owned as reported in the accompanying consolidated balance sheets consist of the fair market value less cost to dispose for those foreclosed units acquired free and clear of any mortgage or other liens plus costs incurred by the Company in excess of original funding on units. Real estate assets owned (free and clear of any mortgage) at December 31, 2018, and 2017, were approximately $122,600 and $196,700 respectively, consisting of one and two units respectively, at these dates. The Company acquired none and one new unencumbered units, net of disposals during 2018 and 2017 that were capitalized at fair value less cost to dispose of approximately $0 and $0, respectively. Most units are quitclaimed to the Company without the Company incurring additional cost and are subject to mortgage. Total units within the real estate portfolio at December 31, 2018 and 2017 as a result of foreclosure action were, including those discussed above, 20 and 66, respectively. During 2018 and 2017, the Company sold twentyseven and eighteen units, respectively, and realized proceeds of approximately $196,000 and $797,000, respectively. Any proceeds collected are first applied to recover the Company’s investment with any remaining proceeds applied next to interest, late fees, legal fees, collection costs and any amounts due to the community association. Any excess proceeds still remaining are recognized as gain on sale of real estate assets. If the future proceeds collected are lower than the Company’s carrying value, then a loss is recognized on the sale. There was no significant gain or loss on the disposal of real estate assets during 2018 or 2017. Rental revenues collected in 2018 and 2017 were approximately $513,000 (net of cost recovery of $10,000) and $737,000, respectively (net of cost recovery of $73,000). As mentioned above, upon a unit being quitclaim deeded to the Company, the Company becomes responsible for current association assessments. The monthly contingent obligation for assessments due on these units to associations as of December 31, 2018 and 2017 approximates $9,000 and $23,000, respectively. |
Long-Term Debt and Other Financ
Long-Term Debt and Other Financing Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt and Other Financing Arrangements | Note 6. Long-Term Debt and Other Financing Arrangements Year ended December 31, 2018 2017 Financing agreement with FlatIron capital that is unsecured. Down payment of $28,125 was required upfront and equal installment payments of $8,701 to be made over a 10 month period. The note matures May 31, 2019. Annualized interest is 5.99% $ 42,875 $ - Financing agreement with FlatIron capital that is unsecured. Down payment of $16,500 was required upfront and equal installment payments of $9,610 to be made over a 10 month period. The note matures May 31, 2018. Annualized interest is 5.25% - 39,028 $ 42,875 $ 39,028 On October 5, 2018, the Company exercised its right to terminate the Purchase Agreement originally entered into on April 2, 2018 with the Investor. The Company also repaid the $500,000 note and accrued interest on October 5, 2018. The Company paid the $200,000 Commitment Fee on November 2, 2018. Minimum required principal payments on the Company’s debt as of December 31, 2018 are as follows : Years Ending December 31, 2019 $ 42,875 $ 42,875 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7. Commitments and Contingencies Leases The Company leases its office under an operating lease beginning March 1, 2014 and ending July 31, 2019 Future minimum lease payments due under this lease as of December 31, 2018 are as follows: Years Ending December 31, 2019 $ 202,051 $ 202,051 The Company shares this space and the related costs associated with this operating lease with a related party (see Note 10) that also performs legal services associated with the collection of delinquent assessments. The Company entered into a sub-lease with an unrelated party but we stopped receiving such sub-lease rental income in September 2018. Net rent expense recognized in 2018 and 2017 approximated $108,000 and $161,000, respectively. Legal Proceedings Other than the lawsuits described below, we are not currently a party to material litigation proceedings. However, we frequently become party to litigation in the ordinary course of business, including either the prosecution or defense of claims arising from contracts by and between us and client Associations. Regardless of the outcome, litigation can have an adverse impact on us because of prosecution, defense, and settlement costs, diversion of management resources and other factors. The Company accrues for contingent obligations, including estimated legal costs, when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, the Company reassesses its position and makes appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal, and other regulatory matters. We were a defendant in an action entitled Solaris at Brickell Bay Condominium Association, Inc. v. LM Funding, LLC As such, the Company adjusted the class action accrual to $100,000 and recorded a $405,000 gain to other income to the statement of operations. The amount was paid during fiscal year 2018. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8. Income Taxes Prior to the initial public offering in October 2015, the earnings of the Predecessor, which was a limited liability company taxed as a partnership, were taxable to its members. In connection with the contribution of membership interests to the Company (a C-Corporation formed in 2015), the net income or loss of the Company after the initial public offering is taxable to the Company and reflected in the accompanying consolidated financial statements. The Company performs an evaluation of the realizability of its deferred tax assets on a quarterly basis. The Company considers all positive and negative evidence available in determining the potential of realizing deferred tax assets, including the scheduled reversal of temporary differences, recent and projected future taxable income and prudent and feasible tax planning strategies. The estimates and assumptions used by the Company in computing the income taxes reflected in the accompanying consolidated financial statements could differ from the actual results reflected in the income tax returns filed during the subsequent year. Adjustments are recorded based on filed returns when finalized or the related adjustments are identified. Under ASC 740-10-30-5, Income Taxes Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the period December 31, 2018 and December 31, 2017) are as follows: Year Ended Year Ended December 31, 2018 December 31, 2017 Current tax benefit Federal $ (222,603 ) $ (1,690,948 ) State (46,058 ) (220,735 ) Total current tax benefit (268,661 ) (1,911,683 ) Deferred tax expense 685,416 (31,974 ) Rate change adjustment - 1,754,830 Valuation allowance (expense) (416,755 ) 3,620,363 Income tax (reduction) benefit $ - $ 3,431,536 The reconciliation of the income tax computed at the combined federal and state statutory rate of 25.3% for the year ended December 31, 2018 and 37.6% for the year ended December 31, 2017 to the income tax benefit is as follows: Year Ended December 31, Year Ended December 31, 2018 2017 2017 2017 Benefit on net loss $ 413,361 -87.5 % $ (1,955,121 ) 37.6 % Nondeductible expenses 3,394 (0.7 )% 11,464 (0.2 )% Rate change adjustment - 0.0 % 1,754,830 -33.8 % Valuation allowance (expense) (416,755 ) 88 % 3,620,363 -69.7 % Other items - 0.0 % - 0.0 % Tax benefit/effective rate $ - 0 % $ 3,431,536 -66.1 % The significant components of the Company’s deferred tax liabilities and assets as of December 31, 2018 and December 31, 2017 are as follows: As of December 31, 2018 2017 Deferred tax liabilities: Tax expense for debt issuance costs $ - $ - Tax expense for internally developed software 9,976 15,871 Tax depreciation in excess of book 4,975 8,921 Total deferred tax liabilities 14,951 24,792 Deferred tax assets: Loss carryforwards 2,156,428 2,393,172 Step up in basis at contribution to C-Corp 853,410 1,024,590 Stock option expense 87,056 80,778 Step up in basis - purchase of non-controlling interest 59,243 63,890 Allowance for credit losses 41,849 62,154 Accrued liabilities 20,572 20,571 Total deferred tax asset 3,218,558 3,645,155 Valuation allowance (3,203,607 ) (3,620,363 ) Net deferred tax asset $ - $ - As discussed above, the Predecessor effected a transaction resulting in the contribution of member interests to the Company (a newly formed C-Corporation). This transaction was recorded at the carryover basis of the Predecessor for both tax and financial reporting purposes. In accordance with ASC 740-10-45-19, Income Taxes |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9. Stockholders’ Equity Stock Issuance Fiscal Year 2017 The Company settled $4,720,860 of principal, accrued interest and other charges by issuing 2,953,189 common shares with a fair value of $5,325,639 which resulted in a $604,779 loss on settlement of debt. Fiscal Year 2018 On October 15, 2018, the Company effected a common share consolidation (“Reverse Stock Split”) by means of a one-for-ten (1:10) reverse split of its outstanding common stock, par value $0.001 per share which resulted in a decrease in outstanding common stock to 625,318 shares. The Reverse Stock Split became effective, on October 16, 2018 and the Company’s common stock began trading on The Nasdaq Global Market on a split-adjusted basis on October 16, 2018. This reduced the number of outstanding shares from 6,253,189 down to 625,319 shares and resulting in a treasury share buyback of 357 shares for $1,894 due to the purchase of fractional shares. The Company has restated all share amounts to reflect the Reverse Stock Split. On October 31, 2018, the Company issued 2,500,000 common shares for net proceeds of $5.2 million after offering costs of $0.2 million. Stock Warrants As part of its initial public offering, o n October 23, 2015 the Company issued warrants that allowed for the right to purchase 120,000 shares of common stock at an average exercise price of $125.00 per share. Due to the Reverse Stock Split on October 16, 2018, each warrant may only purchase one-tenth a share of common stock at $12.50. These warrants have weighted average price of $12.50 and weighted average remaining life of 1.81 and 2.94 as of December 31, 2018 and 2017. These warrants expire in the year 2020. On October 31, 2018, the Company issued warrants as part of its secondary offering that allowed for the right to purchase 2,500,000 shares of common stock at an exercise price of $2.40 per share. These warrants have average remaining life of 4.8 years as of December 31, 2018. These warrants expire in the year 2023. On April 2, 2018, the Company issued warrants that allowed for the right to purchase 40,000 shares of common stock at an exercise price of $6.605 per share. If the Company, at any time this warrant is outstanding, combines its outstanding shares of Common Stock into a smaller number of shares or enters into a corporate action or transaction to change the number of outstanding share of common stock, then the exercise price is adjusted along with the number of shares that can be purchased under this agreement. Due to the subsequent issuance of stock and warrants on October 31, 2018, these warrants now have the right to purchase 143,587 shares at an exercise price of $1.84 per share. These warrants have average remaining life of 4.25 years as of December 31, 2018. These warrants expire in the year 2023. Stock Options The 2015 Omnibus Incentive Plan provides for the issuance of stock options, stock appreciation rights, performance shares, performance units, restricted stock, restricted stock units, shares of our common stock, dividend equivalent units, incentive cash awards or other awards based on our common stock. Awards may be granted alone or in addition to, in tandem with, or (subject to the 2015 Omnibus Incentive Plan’s prohibitions on repricing) in substitution for any other award (or any other award granted under another plan of ours or of any of our affiliates). On November 29, 2017 the Company granted a total of 2,500 stock options to an employee at an exercise price of $125.00 per share. These awards will vest evenly over a three year period. The maximum term of an option is 10 years from the date of grant. The grant date fair value of the options was $0.29. Total expense to be recognized for the employee options is approximately $5,800. On May 29, 2018 the Company granted a total of 10,000 stock options to an employee at an exercise price of $10.00 per share. These awards will vest evenly over a three year period. The maximum term of an option is 10 years from the date of grant. The grant date fair value of the options was $4.68. Total expense to be recognized after adjusting for forfeitures for the employee options is approximately $35,000. The Black-Scholes pricing model was used to determine the fair value of the stock options granted by the Company. The Company recognizes this value as an expense over the period in which the stock options vest. The weighted average grant date fair value of the options granted was $4.68 and $2.90, respectively for awards granted in the years ended December 31, 2018 and 2017 Compensation expense recognized from the vesting of stock options was approximately $25,000 of which $18,000 was for options issued prior to 2018 and $29,000 of which $28,800 was for options issued prior to 2017, respectively for the years ended December 31, 2018 and 2017. The remaining unrecognized compensation cost associated with unvested stock options as of December 31, 2018 and 2017 is approximately $32,000 and $37,000, respectively. At December 31, 2018 and 2017, the stock options had a remaining life of approximately 7 and 8 years, respectively The aggregate intrinsic value of the outstanding common stock options as of December 31, 2018 and 2017 was $0 and $0 respectively. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions. The model requires the use of subjective assumptions. Expected volatility was based on the historical volatility of another public company with a similar business model and comparable market share as the Company. The expected life (in years) was determined using historical data to estimate options exercise patterns. The Company does not expect to pay any dividends for the foreseeable future thus zero was in the calculation. The risk-free interest rate was based on the rate for US Treasury bonds commensurate with the expected term of the granted options. Significant assumptions used in the option-pricing model to fair value options granted were as follows: 2018 Risk-free rate 2.65 % Expected life 6 years Expected volatility 108.00 % Expected dividend — 2017 Risk-free rate 2.27 % Expected life 6 years Expected volatility 50.00 % Expected dividend — The following is a summary of the stock option plan activity during 2018 and 2017: 2018 2017 Number of Weighted Average Number of Weighted Average Options Exercise Price Options Exercise Price Options Outstanding at Beginning of the year 11,290 $ 111.07 21,537 $ 113.80 Granted 10,000 10.00 2,500 125.00 Exercised - - - - Adjustment 1,010 125.00 793 125.00 Forfeited (3,000 ) 120.83 (13,540 ) 125.00 Options Outstanding at End of Year 19,300 $ 57.91 11,290 $ 11.11 Options Exercisable at End of Year 6,630 $ 105.68 6,290 $ 103.30 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10. Related Party Transactions Legal services for the Company associated with the collection of delinquent assessments from property owners are performed by a law firm (Business Law Group “BL G”) which was owned solely by Bruce M. Rodgers, the Chief Executive Officer of LMFA until and through the date of the initial public offering. Following the offering, Mr. Rodgers transferred his interest in BLG to other attorneys at the firm through a redemption of his interest in the firm, and BLG is now under control of those lawyers. The law firm has historically performed collection work primarily on a deferred billing basis wherein the law firm receives payment for services rendered upon collection from the property owners or at amounts ultimately subject to negotiations with the Company. During 2016, the Company experienced a decline in collection events that affected revenues both to the Company and BLG. That resulted in an increase in the related party receivable and reflects the decision by the Company to advance funds to BLG based on the amount of their unpaid legal fees due from property owners. Effective January 1, 2017, the Company entered into a new services agreement with BLG which partially alters the traditional deferred billing arrangement noted above. Under the new agreement, the Company pays BLG a fixed monthly fee of $82,000 per month for services rendered. The Company will continue to pay BLG a minimum per unit fee of $700 in any case where there is a collection event and BLG receives no payment from the property owner. This provision has been expanded to also include any unit where the Company has taken title to the unit or where the association has terminated its contract with either BLG or the Company. Amounts collected from property owners and paid to BLG for 2018 and 2017 were approximately $984,000 and $1,136,000, respectively. As of December 31, 2018 and 2017, receivables from property owners for charges ultimately payable to BLG approximate $2,753,000 and $3,657,000, respectively. Under the related party agreement with BLG in effect during 2017 and 2018, the Company pays all costs (lien filing fees, process and serve costs) incurred in connection with the collection of amounts due from property owners. Any recovery of these collection costs are accounted for as a reduction in expense incurred. The Company incurred expenses related to these types of costs of $297,000 and $560,000, during 2018 and 2017, respectively. The Company also shares office space and related common expenses with BLG. All shared expenses, including rent, are charged to the legal firm based on an estimate of actual usage. Any expenses of BLG paid by the Company that have not been reimbursed or settled against other amounts are reflected as due from related parties in the accompanying consolidated balance sheet. The Company assessed the collectability of the amount due from BLG and concluded that even though BLG had repaid $252,771 during 2017, it did not have the ability to repay the remaining balance at the end of 2017 and as such took a reserve of approximately $1.4 million for the balance due as of December 31, 2017. Amounts receivable from BLG as of December 31, 2018 and 2017 were approximately $25,500 and $0, respectively. LMF has engaged BLG on behalf of many of its Association clients to service and collect the accounts and to distribute the proceeds as required by Florida law and the provisions of the purchase agreements between LMF and the Associations. In addition, Ms. Gould entered an employment agreement to work part-time for LMF. Ms. Gould’s employment agreement with LMF permits her to also work as General Manager of Business Law Group, P.A. which pays her additional compensation of $150,000 per year. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 11. Fair Value of Financial Instruments The Company estimates that the fair value of its financial assets and liabilities approximate carrying value except for its finance receivables. FASB ASC 820, Fair Value Measurements and Disclosures defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to classify its fair value estimates based on the “Level” of reliability of data inputs used in those estimates. Under this guidance, financial instruments are categorized within the fair value hierarchy as follows: Level 1 inputs – Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be assessed at the measurement date. Level 2 inputs – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs – Unobservable inputs significant to the fair value estimate that are supported by little or no market pricing and are based on the Company’s estimates and assumptions that presumably market participants would use. The Company considers the data inputs used to estimate the fair value of its finance receivables to fall within Level 3 of the fair value hierarchy. Fair value measurements as noted below are based on the income approach using a discount rate of 8.65% and 7.95% for finance receivables at December 31, 2018 and 2017, respectively. The recovery period as of both dates was assumed to be 8.5 years. The carrying amount and estimated fair value of finance receivables at December 31 are as follows: 2018 2017 Carrying Fair Carrying Fair Amount Value Amount Value Finance receivables: Original product $ 425,000 $ 4,005,000 $ 638,000 $ 5,705,000 Special product, net of allowance (1) 237,000 543,000 339,000 890,000 (1) New Neighbor Guaranty program |
Management's Plan
Management's Plan | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Management's Plan | Note 12 Management’s Plan On August 27, 2014, FASB issued ASU 2014-05, Disclosure of Uncertainties about an Entity’s ability to Continue as a Going Concern The Company has experienced significant operating losses over the past 3 years (2016 through 2018) with cumulative losses of approximately $11,490,000. These losses resulted in the usage of all cash proceeds from the Company’s initial public offering in 2015. The Company was able to settle the $4,720,860 promissory note that had been due in April 2018 along with accrued interest and other costs with its primary creditor in exchange for 2,953,189 common shares and repay its other outstanding promissory note of $717,500 during the twelve months ended December 31, 2017. After the Company was able to stabilize its business, it successfully raised $5.4 million through a secondary public offering on October 30, 2018.). Under a purchase agreement dated January 16, 2019, the Company owes Craven $3,582,613 which may be converted into common stock or paid in cash by January 15, 20120. Craven’s intent is to convert the note into common shares and has agreed to extend repayment 12 months from April 15, 2019. We believe that we have enough cash to mitigate the substantial doubt raised by our recent operating losses and satisfy our estimated liquidity needs for the 12 months from the issuance of these financial statements and avoid any substantial doubt about the Company’s ability to continue as a going concern as defined by ASU 2014-05. However, we cannot predict, with certainty, the outcome of our actions to generate liquidity, including the availability of additional debt financing, or whether such actions would generate the expected liquidity as currently planned. Additionally, a failure to generate additional liquidity could negatively impact our ability to acquire units. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13. Subsequent Events On January 15, 2019, the Company entered into a Stock Purchase Agreement with Craven House North America, LLC ( “Craven” “IIU” global medical insurance products for international travelers, specializing in policies covering high-risk destinations, emerging markets and foreign travelers coming to the United States. All policies are fully underwritten with no claim risk remaining with IIU. The Board of Directors of LMFA approved the purchase of IIU. LMFA purchased 100% of the outstanding stock of IIU for $5,075,000. IIU is required to have a minimum net working capital of $15,000 and at least $152,000 in cash. LMFA paid the Purchase Price at closing as follows: • Cancellation by LMFA of all principal and accrued interest of IIU’s Promissory Note dated November 3, 2018 and issued to LMFA for principal indebtedness and accrued interest of $1,507,387. • LMFA issued to Craven a $3,582,613 Convertible Promissory Note for the balance of the Purchase Price. At the option of Craven, the Convertible Note may be paid in restricted common shares of LMFA or cash. The Convertible Note shall bear simple interest at 3% per annum. The Convertible Note shall be due and payable 360 days from the Closing Date. If repaid by LMFA in restricted common stock, the outstanding principal and interest of the Convertible Note shall be paid by LMFA by issuing to Seller a number of restricted common shares equal to the adjusted principal and accrued interest owing on the Convertible Note divided by $2.41. Craven has verbally agreed to extend repayment of this Convertible Promissory Note 12 months from April 15, 2019. LMFA shall seek shareholder approval for issuing restricted common shares in payment of the Convertible Note. As a condition to closing, LMFA’s officer and directors agreed to vote all of their shares in favor of approving the issuance of shares pursuant to the Convertible Note. The closing date of the transaction occurred on January 15, 2019. The effective date of the transaction was January 1, 2019. The definitive agreements requires LMFA to provide customary covenants including, but not be limited to, covenants restricting subsequent indebtedness, issuance of securities, payment of indebtedness, conduct of business, redemptions, cash or stock dividends, pledge of securities, foreign investments and other transactions affecting the amount of issued and outstanding shares of LMFA’s common stock. The Company purchased IIU after December 31, 2018, as such there are no revenue or earnings of the acquired included in the consolidated income statement for the year ended December 31, 2018. The Company provided the audited financial statements of IIU in a Form 8-K filed on April 8, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations LM Funding America, Inc. (“LMFA” or the “Company”) was formed as a Delaware corporation on April 20, 2015. LMFA was formed for the purpose of completing a public offering and related transactions in order to carry on the business of LM Funding, LLC and its subsidiaries (the “Predecessor”). LMFA is the sole member of LM Funding, LLC and operates and controls all of its businesses and affairs. LM Funding, LLC a Florida limited liability company organized in January 2008 under the terms of an Operating Agreement dated effective January 8, 2008 as amended, had two members: BRR Holding, LLC and CGR 63, LLC. The members contributed their equity interest to LMFA prior to the closing of its initial public offering. The Company acquired IIU, Inc. on January 15, 2019 (IIU, Inc) global medical insurance products for international travelers, specializing in policies covering high-risk destinations, emerging markets and foreign travelers coming to the United States. All policies are fully underwritten with no claim risk remaining with IIU Inc. We are a diversified business with two focuses: • specialty finance company that provides funding to nonprofit community associations primarily located in the state of Florida. We offer incorporated nonprofit community associations, which we refer to as “Associations,” a variety of financial products customized to each Association’s financial needs. Our original product offering consists of providing funding to Associations by purchasing their rights under delinquent accounts that are selected by the Associations arising from unpaid Association assessments. Historically, we provided funding against such delinquent accounts, which we refer to as “Accounts,” in exchange for a portion of the proceeds collected by the Associations from the account debtors on the Accounts. We have started purchasing Accounts on varying terms tailored to suit each Association’s financial needs, including under our New Neighbor Guaranty™ program. • specialty health insurance broker (IIU, Inc) that was purchased o n January 15, 2019, which provides Specialty Finance The Company has a specialty finance company that provides funding principally to community associations that are almost exclusively located in Florida. The business of the Company is conducted pursuant to relevant state statutes (the “Statutes”), principally Florida Statute 718.116. The Statutes provide each community association lien rights to secure payment from unit owners (property owners) for assessments, interest, administrative late fees, reasonable attorneys’ fees, and collection costs. In addition, the lien rights granted under the Statutes are given a higher priority (a “Super Lien”) than all other lien holders except property tax liens. The Company provides funding to associations for their delinquent assessments from property owners in exchange for an assignment of the association’s right to collect proceeds pursuant to the Statutes. The Company derives its revenues from the proceeds of association collections. The Statutes specify that the rate of interest an association (or its assignor) may charge on delinquent assessments is equal to the rate set forth in the association’s declaration or bylaws. In Florida if a rate is not specified, the statutory rate is equal to 18% but may not exceed the maximum rate allowed by law. Similarly, the Statutes in Florida also stipulate that administrative late fees cannot be charged on delinquent assessments unless so provided by the association’s declaration or bylaws and may not exceed the greater of $25 or 5% of each delinquent assessment. The Statutes limit the liability of a first mortgage holder for unpaid assessments and related charges and fees (as set forth above) in the event of title transfer by foreclosure or acceptance of deed in lieu of foreclosure. This liability is limited to the lesser of twelve months of regular periodic assessments or one percent of the original mortgage debt on the unit (the “Super Lien Amount”). Specialty Health Insurance Our subsidiary IIU Inc. (“IIU”) through its wholly owned company Wallach and Company (“Wallach”) offers health insurance, travel insurance and other travel services to: • United States citizens and residents traveling abroad • Non United States citizens or residents who travel to the United States These services are typically sold through a policy offered by Wallach and fully underwritten by a third party insurance company. The policies offered include: • HealthCare Abroad - Short term medical insurance, medical evacuation and international assistance for Americans traveling overseas. There is an age limit of 84 years old. • HealthCAre Global – up to 6 months coverage for Americans traveling abroad and foreign nationals traveling outside their home countries to destinations other than the United States. There is an age limit of 70 years old. • HealthCare America – up to 90 days coverage for foreign nationals visiting the United States. There is an age limit of 70 years old. • HealthCare International – International medical insurance & assistance for persons living outside their home country. There is an age limit of 70 years old. • HealthCare War – up to 6 months coverage for Americans traveling abroad and foreign nationals traveling outside their home countries to identified war risk areas. There is an age limit of 70 years old. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of LMFA and its wholly-owned subsidiaries: LM Funding, LLC; LMF October 2010 Fund, LLC; REO Management Holdings, LLC (including all 100% owned subsidiary limited liability companies); LM Funding of Colorado, LLC; LM Funding of Washington, LLC; LM Funding of Illinois, LLC; and LMF SPE #2, LLC and various single purpose limited liability corporations owned by REO Management Holdings, LLC which own various properties. All significant intercompany balances have been eliminated in consolidation. |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared by the Company, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). The Company prepares its consolidated financial statements in conformity with generally accepted accounting principles in the United States (“GAAP”). |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the evaluation of any probable losses on amounts funded under the Company’s New Neighbor Guaranty |
Revenue Recognition | Revenue Recognition Accounting Standards Codification (“ASC”) 605-10-25-1 of the Financial Accounting Standards Board (“FASB”) states revenues are realized or realizable when related assets received or held are readily convertible into known amounts of cash. In those cases where there is no reasonable basis for estimating the “known amount” of cash to be collected, the cash basis or cost recovery method of recognizing revenues may be used. The Company provides funding to community associations by purchasing their rights under delinquent accounts from unpaid assessments due from property owners (the “accounts”). Collections on the accounts may vary greatly in both the timing and amount ultimately recovered compared with the total revenues earned on the accounts because of a variety of economic and social factors affecting the real estate environment in general. The Company has determined that the known amount of cash to be realized or realizable on its revenue generating activities cannot be reasonably estimated and as such, classifies its finance receivables as nonaccrual and recognizes revenues in the accompanying statements of income on the cash basis or cost recovery method in accordance with ASC 310-10, . The Company recognized revenue in 2017 pursuant to ASC 605 while recognizing revenue in 2018 pursuant to ASC 606. Accounting Standards Codification (“ASC”) 606 of the Financial Accounting Standards Board (“FASB”) states an entity needs to conclude at the inception of the contract that collectability of the consideration to which it will be entitled in exchange for the goods and services that will be transferred to the customer is probable. That is, in some circumstances, an entity may not need to assess its ability to collect all of the consideration in the contract. The Company provides funding to community associations by purchasing their rights under delinquent accounts from unpaid assessments due from property owners (the “accounts”). Collections on the accounts may vary greatly in both the timing and amount ultimately recovered compared with the total revenues earned on the accounts because of a variety of economic and social factors affecting the real estate environment in general. The Company’s contracts with its customers have very specific performance obligations. The Company has determined that the known amount of cash to be realized or realizable on its revenue generating activities cannot be reasonably estimated. The Company determined rental income from leasing arrangements is specifically excluded from the standard. The Company analyzed its remaining revenue streams and concluded there were no changes in revenue recognition with the adoption of the new standard. Under both ASC 605 and ASC 606, the Company applies the cash basis method to its original product and the cost recovery method to its special product as follows: Finance Receivables—Original Product : Under the Company’s original product, delinquent assessments are funded only up to the Super Lien Amount as discussed above. Recoverability of funded amounts is generally assured because of the protection of the Super Lien Amount. As such, payments by unit owners on the Company’s original product are recorded to income when received in accordance with the provisions of the Florida Statute (718.116(3)) and the provisions of the purchase agreements entered into between the Company and community associations. Those provisions require that all payments be applied in the following order: first to interest, then to late fees, then to costs of collection, then to legal fees expended by the Company and then to assessments owed. In accordance with the cash basis method of recognizing revenue and the provisions of the statute, the Company records revenues for interest and late fees when cash is received. In the event the Company determines the ultimate collectability of amounts funded under its original product are in doubt, payments are applied to first reduce the funded or principal amount. Finance Receivables—Special Product (New Neighbor Guaranty program) : During 2012, the Company began offering associations an alternative product under the program where the Company will fund amounts in excess of the Super Lien Amount. Under this special product, the Company purchases substantially all of the delinquent assessments owed to the association, in addition to all accrued interest and late fees, in exchange for payment by the Company of (i) a negotiated amount or (ii) on a going forward basis, all monthly assessments due for a period up to 48 months. Under these arrangements, the Company considers the collection of amounts funded is not assured and under the cost recovery method, cash collected is applied to first reduce the carrying value of the funded or principal amount with any remaining proceeds applied next to interest, late fees, legal fees, collection costs and any amounts due to the community association. Any excess proceeds still remaining are recognized as revenues. If the future proceeds collected are lower than the Company’s funded or principal amount, then a loss is recognized. |
Cash | Cash The Company maintains cash balances at several financial institutions that are insured under the Federal Deposit Insurance Corporation’s (“FDIC”) Transition Account Guarantee Program. Balances with the financial institutions may exceed federally insured limits. |
Financing Receivables | Finance Receivables Finance receivables are recorded at the amount funded or cost (by unit). The Company evaluates its finance receivables at each period end for losses that are considered probable and can be reasonably estimated in accordance with ASC 450-20. As discussed above, recoverability of funded amounts under the Company’s original product is generally assured because of the protection of the Super Lien Amount. However, the Company did accrue at December 31, 2017 an allowance for credit losses for this program of $194,000 and recorded a provision for credit losses of $141,286 (net of deferred origination fees of $52,714 recognized prior to 2015 and reversed in the current year). Under the New Neighbor Guaranty The Company will charge any receivable against the allowance for credit losses when management believes the uncollectibility of the receivable is confirmed. The Company considers writing off a receivable when (i) a first mortgage holder who names the association in a foreclosure suit takes title and satisfies an estoppel letter for amounts owed which are less than amounts the Company funded to the association; (ii) a tax deed is issued with insufficient excess proceeds to pay amounts the Company funded to the association; (iii) an association settles an account for less than amounts the Company funded to the association or (iv) the association terminates its relationship with the Company’s designated legal counsel. Upon the occurrence of any of these events, the Company evaluates the potential recovery via a deficiency judgment against the prior owner and the ability to collect upon the deficiency judgment within the statute of limitations period or whether the deficiency judgment can be sold. If the Company determines that collection through a deficiency judgment or sale of a deficiency judgment is not feasible, the Company writes off the unrecoverable receivable amount. Any losses greater than the recorded allowance will be recognized as expenses. Under the Company’s revenue recognition policies, all finance receivables (original product and special product) are classified as nonaccrual. |
Investment in Note Receivable | Investment in Note Receivable On November 2, 2018, the Company entered into a Securities Purchase Agreement with IIU Inc. (“IIU”), pursuant to which IIU issued to the Company a Senior Convertible Promissory Note (“IIU Note”) in the original principal amount of $1,500,000 in exchange for a purchase price of $1,500,000. The maturity date of the Note is 360 dates after the date of issuance (subject to acceleration upon an event of default). The Note carries a 3.0% interest rate, with accrued but unpaid interest being payable on the Note’s maturity date. The IIU Note allows the Company the right on or after the maturity date to convert any unpaid principal and accrued and unpaid interest of the IIU Note into shares of IIU based on a conversion amount which is the fair value of the common shares of IIU at the time. The Company subsequently purchased 100 |
Real Estate Assets Owned | Real Estate Assets Owned In the event collection of a delinquent assessment results in a unit being sold in a foreclosure auction, the Company has the right to bid (on behalf of the community association) for the delinquent unit as attorney in fact, applying any amounts owed for the delinquent assessment to the foreclosure price as well as any additional funds that the Company, in its sole discretion, decides to pay. If a delinquent unit becomes owned by the community association by acquiring title through an association lien foreclosure auction, by accepting a deed-in-lieu of foreclosure, or by any other way, the Company in its sole discretion may direct the community association to quitclaim title of the unit to the Company. Properties quitclaimed to the Company are in most cases acquired subject to a first mortgage or other liens, and are recognized in the accompanying consolidated balance sheets solely at costs incurred by the Company in excess of original funding. At times, the Company will acquire properties through foreclosure actions free and clear of any mortgages or liens. In these cases, the Company records the estimated fair value of the properties in accordance with ASC 820-10, Fair Value Measurements The Company capitalizes costs incurred to acquire real estate owned properties and any costs incurred to get the units in a condition to be rented. These costs include, but are not limited to, renovation/rehabilitation costs, legal costs, and delinquent taxes. These costs are depreciated over the estimated minimum time period the Company expects to maintain possession of the units. Costs incurred for unencumbered units are depreciated over 20 years and costs for units subject to a first mortgage are depreciated over 3 years. As of December 31, 2018 and 2017, capitalized real estate costs, net of accumulated depreciation, were $122,604 and $196,707, respectively. During the years ended December 31, 2018 and 2017, depreciation expense was $45,577 and $46,342, respectively. If the Company elects to take a quitclaim title to a unit or property held for sale, the Company is responsible to pay all future assessments on a current basis, until a change of ownership occurs. The community association must allow the Company to lease or sell the unit to satisfy obligations for delinquent assessments of the original debt. All proceeds collected from any sale of the unit shall be first applied to all amounts due the Company plus any additional funds paid by the Company to purchase the unit, if applicable. Rental revenues and sales proceeds related to real estate assets held for sale are recognized when earned and realizable. Expenditures for current assessments owed to associations, repairs and maintenance, utilities, etc. are expensed when incurred. If the community association elects (prior to the Company obtaining title through its own election) to maintain ownership and not quitclaim title to the Company, the community association must pay the Company all interest, late fees, collection costs, and legal fees expended, plus the original funding on the unit, which have accrued according to the purchase agreement entered into by the community association and the Company. In this event, the unit will be reassigned to the community association. |
Fixed Assets | Fixed Assets The Company capitalizes all acquisitions of fixed assets in excess of $500. Fixed assets are stated at cost. Depreciation is provided on the straight-line method over the estimated useful lives of the assets. Fixed assets are comprised of furniture, computer and office equipment with an assigned useful life of 3 to 5 years. Fixed assets also includes capitalized software costs. Capitalized software costs include costs to develop software to be used solely to meet the Company’s internal needs, consist of employee salaries and benefits and fees paid to outside consultants during the application development stage, and are amortized over their estimated useful life of 5 years. As of December 31, 2018 and December 31, 2017, capitalized software costs, net of accumulated amortization, was $21,951 and $45,210, respectively. Amortization expense for capitalized software costs for the periods ended December 31, 2018 and December 31, 2017 was $23,259. |
Debt Issue Costs | Debt Issue Costs The Company capitalizes all debt issue costs and amortizes them on a method that approximates the effective interest method over the remaining term of the note payable. Unamortized debt issue costs of $0 at December 31, 2018 and $0 at December 31, 2017 are presented in the accompanying condensed consolidated balance sheets as a direct deduction from the carrying amount of that debt liability in accordance with Accounting Standards Update (“ASU”) 2015-03. The Company incurred $291,760 of debt issue costs during the year ended December 31, 2018. |
Debt Discount | Debt Discount On April 2, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with a New York-based family office (“Investor”), which was subsequently amended (see Note 13. Subsequent Events) The 40,000 warrants were valued on the grant date at approximately $3.87 per warrant or a total relative fair value of $154,676 using a Black-Scholes option pricing model with the following assumptions: stock price of $7.40 per share (based on the quoted trading price on the date of grant), volatility of 100.6%, expected term of 5 years, and a risk-free interest rate of 2.55%. The relative fair value of the warrants ($154,676) was treated as a debt discount that is being amortized over 6 months. The amortization of the discount is recognized as interest expense of which $154,676 was recognized for the year ended December 31, 2018. |
Settlement Costs with Associations | Settlement Costs with Associations Community associations working with the Company will at times incur costs in connection with litigation initiated by the Company against property owners and or mortgage holders. These costs include settlement agreements whereby the community association agrees to pay some monetary compensation to the opposing party or judgments against the community associations for fees of opposing legal counsel or other damages awarded by the courts. The Company indemnifies the community association for these costs pursuant to the provisions of the agreement between the Company and the community association. Costs incurred by the Company for these indemnification obligations for the year ended December 31, 2018 and 2017 were $40,027 and $269,576, respectively. The Company does not limit its indemnification based on amounts ultimately collected from property owners. |
Income Taxes | Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes resulting primarily from the tax effects of temporary differences between financial and income tax reporting. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-30-5, Income Taxes Prior to the initial public offering in October 2015, the taxable earnings of the Predecessor were included in the tax returns of its members (separate limited liability companies) and taxed depending on personal tax situations. In connection with the initial public offering, the members contributed ownership interests to the Company (a newly form C-Corporation) and all earnings subsequent to that date (October 23, 2015) are subject to taxes and reflected in the Company’s consolidated financial statements. |
Loss Per Share | Loss Per Share Basic loss per share is calculated as net loss to common stockholders divided by the weighted average number of common shares outstanding during the period. The Company issued 2,500,000 shares at various times during the month of November 2018 and has weighted average these new shares in calculating loss per share. On October 15, 2018, the Company effected a common share consolidation (“Reverse Stock Split”) by means of a one-for-ten (1:10) reverse split of its outstanding common stock, par value $0.001 per share which resulted in a decrease in outstanding common stock to 625,318 shares. The Reverse Stock Split became effective, on October 16, 2018 and the Company’s common stock began trading on The Nasdaq Global Market on a split-adjusted basis on October 16, 2018. The Company has restated all share amounts to reflect the Reverse Stock Split. Diluted loss per share for the period equals basic loss per share as the effect of any stock based compensation awards or stock warrants would be anti-dilutive. The anti-dilutive stock based compensation awards consisted of: For the years ended December 31 2018 2017 Stock Options 19,300 11,290 Stock Warrants – number of shares to purchase 2,763,387 120,000 |
Stock-Based Compensation | Stock-Based Compensation The Company records all equity-based incentive grants to employees and non-employee members of the Company’s Board of Directors in operating expenses in the Company’s Consolidated Statements of Operations based on their fair values determined on the date of grant. Stock-based compensation expense, reduced for estimated forfeitures, is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the outstanding equity awards. |
Contingencies | Contingencies The Company accrues for contingent obligations, including estimated legal costs, when the obligation is probable and the amount is reasonably estimable. As facts concerning contingencies become known, the Company reassesses its position and makes appropriate adjustments to the consolidated financial statements. Estimates that are particularly sensitive to future changes include those related to tax, legal and other regulatory matters. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments FASB ASC 825-10, Financial Instruments, requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet. The Company engages a third party valuation firm to assist in estimating the fair value of its finance receivables. See Note 11. |
Related Party | Related Party ASC 850 - Related Party Disclosures requires disclosure of related party transactions and certain common control relationships. The Company disclosures related party transactions and such transactions are approved by the board of directors. See Note 10. |
Risks and Uncertainties | Risks and Uncertainties Funding amounts are secured by a priority lien position provided under Florida law (see discussion above regarding Florida Statute 718.116). However, in the event the first mortgage holder takes title to the property, the amount payable by the mortgagee to satisfy the priority lien is capped under this same statute and would generally only be sufficient to reimburse the Company for funding amounts noted above for delinquent assessments. Amounts paid by the mortgagee would not generally reimburse the Company for interest, administrative late fees and collection costs. Even though the Company does not recognize these charges as revenues until collected, its business model and long-term viability is dependent on its ability to collect these charges. In the event a delinquent unit owner files for bankruptcy protection, the Company may at its option be reimbursed by the association for the amounts funded (i.e., purchase price) and all collection rights are re-assigned to the association. |
Non-cash Financing and Investing Activities | Non-cash Financing and Investing Activities During the year ended December 31, 2018 and 2017, the Company acquired unencumbered title to certain properties as a result of foreclosure proceedings. Properties were recorded at fair value less cost to dispose of approximately $0 and $0, respectively. The fair value of these properties was first applied to recover the Company’s initial investment with any remaining proceeds applied to interest, late fees, and other amounts owed by the property owner. |
Credit Losses | Credit Losses – In June 2016, the FASB issued ASU 2016-13- which establishes a new approach for credit impairment based on an expected loss model rather than an incurred loss model. The standard requires the consideration of all available relevant information when estimating expected credit losses, including past events, current conditions and forecasts and their implications for expected credit losses. The guidance is effective January 1, 2020 with a one-year early adoption permitted. The Company is evaluating the impact of the new guidance. |
Settlement of Debt | Settlement of Debt – for the year ended December 31, 2017 the Company settled $4,721,000 of principal, accrued interest and other charges by issuing 295,318 common shares. The Company settled $180,585 of accrued interest through the issuance of shares. |
Financing of Insurance Premium | Financing of Insurance Premium – the Company financed the purchase of various insurance policies during the year ended December 31, 2018 and 2017 using a $85,000 and $78,000 financing agreement. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2017, the FASB issued ASU 2017-09, "Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting," which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting pursuant to Topic 718. ASU 2017-09 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. Early adoption is permitted. The amendments in this update are required to be applied prospectively to an award modified on or after the adoption date. This standard becomes effective for the Company as of January 1, 2018. The impact this standard will have on the Company's consolidated financial statements and related disclosures will be dependent on the terms and conditions of any modifications made to share-based awards after January 1, 2018. The Company did not have any modifications during 2018. In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)." This ASU creates a single, comprehensive revenue recognition model for all contracts with customers. The model is based on changes in contract assets (rights to receive consideration) and liabilities (obligations to provide a good or service). Revenue will be recognized based on the satisfaction of performance obligations, which occurs when control of a good or service transfers to a customer and enhanced disclosures will be required regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. Either a retrospective or cumulative effect transition method, referred to as the modified retrospective method, is permitted. The impact from the adoption of this standard was immaterial to the consolidated financial statements for the full fiscal year 2018. The Company adopted ASU 2014-09 on January 1, 2018 using the modified retrospective method but did not recognize any cumulative effect of initially applying the new standard as an increase to the opening balance of retained earnings. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)," which requires lessees to recognize right-of-use assets and lease liability, initially measured at present value of the lease payments, on its balance sheet for leases with terms longer than 12 months and classified as either financing or operating leases. ASU 2016-02 requires a modified retrospective transition approach for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, and provides certain practical expedients that companies may elect including those contained in ASU 2018-01, "Leases (Topic 842): Lease Easement Practical Expedient for Transition to Topic 842". This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with early adoption permitted. The Company has evaluated the impact that the adoption of this ASU will have on its consolidated financial statements and related disclosures and does not expect any significant impact to the Company. Recent Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses In June 2018, the FASB issued ASU No. 2018-07 " Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting". The standard simplified the accounting for share-based payments granted to nonemployees for goods and services, therefore guidance on such payments to nonemployees would be mostly aligned with the requirements for share-based payments granted to employees. ASU 2018-07 will be effective for us beginning October 1, 2019, but early adoption is permitted (but no earlier than the adoption date of Topic 606). We are currently evaluating the impact of implementation of this standard on our financial statements. Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact to the Company. |
Reclassifications | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Anti-dilutive Stock Based Compensation Awards | The anti-dilutive stock based compensation awards consisted of: For the years ended December 31 2018 2017 Stock Options 19,300 11,290 Stock Warrants – number of shares to purchase 2,763,387 120,000 |
Finance Receivables - Origina_2
Finance Receivables - Original Product (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Finance Receivables for Original Product | Finance receivables for the original product as of December 31, based on the year of funding are approximately as follows: 2018 2017 Funded during the current year $ 79,000 $ 118,000 1-2 years outstanding 35,000 38,000 2-3 years outstanding 18,000 12,000 3-4 years outstanding 7,000 24,000 Greater than 4 years outstanding 411,000 640,000 550,000 832,000 Reserve for credit losses (125,000 ) (194,000 ) $ 425,000 $ 638,000 Number of active units with delinquent assessments 826 1,162 Amount of outstanding interest and late fees on active units $ 11,268,000 $ 14,600,000 |
Finance Receivables - Special_2
Finance Receivables - Special Product (New Neighbor Guaranty program) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Receivables [Abstract] | |
Schedule of Delinquent Assessments and Accrued Charges | Delinquent assessments and accrued charges under these arrangements as of December 31, are as follows: 2018 2017 Finance receivables, net $ 237,000 $ 339,000 Delinquent assessments 707,000 1,200,000 Accrued interest and late fees 465,000 728,000 Number of active units with delinquent assessments 58 97 |
Long-Term Debt and Other Fina_2
Long-Term Debt and Other Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Year ended December 31, 2018 2017 Financing agreement with FlatIron capital that is unsecured. Down payment of $28,125 was required upfront and equal installment payments of $8,701 to be made over a 10 month period. The note matures May 31, 2019. Annualized interest is 5.99% $ 42,875 $ - Financing agreement with FlatIron capital that is unsecured. Down payment of $16,500 was required upfront and equal installment payments of $9,610 to be made over a 10 month period. The note matures May 31, 2018. Annualized interest is 5.25% - 39,028 $ 42,875 $ 39,028 |
Schedule of Principal Payments of Debt | Minimum required principal payments on the Company’s debt as of December 31, 2018 are as follows : Years Ending December 31, 2019 $ 42,875 $ 42,875 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payment Due | Future minimum lease payments due under this lease as of December 31, 2018 are as follows: Years Ending December 31, 2019 $ 202,051 $ 202,051 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Provision for Income Taxes | Significant components of the tax expense (benefit) recognized in the accompanying consolidated statements of operations for the period December 31, 2018 and December 31, 2017) are as follows: Year Ended Year Ended December 31, 2018 December 31, 2017 Current tax benefit Federal $ (222,603 ) $ (1,690,948 ) State (46,058 ) (220,735 ) Total current tax benefit (268,661 ) (1,911,683 ) Deferred tax expense 685,416 (31,974 ) Rate change adjustment - 1,754,830 Valuation allowance (expense) (416,755 ) 3,620,363 Income tax (reduction) benefit $ - $ 3,431,536 |
Schedule of Reconciliation of Tax Provision with Expected Provision | The reconciliation of the income tax computed at the combined federal and state statutory rate of 25.3% for the year ended December 31, 2018 and 37.6% for the year ended December 31, 2017 to the income tax benefit is as follows: Year Ended December 31, Year Ended December 31, 2018 2017 2017 2017 Benefit on net loss $ 413,361 -87.5 % $ (1,955,121 ) 37.6 % Nondeductible expenses 3,394 (0.7 )% 11,464 (0.2 )% Rate change adjustment - 0.0 % 1,754,830 -33.8 % Valuation allowance (expense) (416,755 ) 88 % 3,620,363 -69.7 % Other items - 0.0 % - 0.0 % Tax benefit/effective rate $ - 0 % $ 3,431,536 -66.1 % |
Components of Deferred Tax Assets and Liabilities | The significant components of the Company’s deferred tax liabilities and assets as of December 31, 2018 and December 31, 2017 are as follows: As of December 31, 2018 2017 Deferred tax liabilities: Tax expense for debt issuance costs $ - $ - Tax expense for internally developed software 9,976 15,871 Tax depreciation in excess of book 4,975 8,921 Total deferred tax liabilities 14,951 24,792 Deferred tax assets: Loss carryforwards 2,156,428 2,393,172 Step up in basis at contribution to C-Corp 853,410 1,024,590 Stock option expense 87,056 80,778 Step up in basis - purchase of non-controlling interest 59,243 63,890 Allowance for credit losses 41,849 62,154 Accrued liabilities 20,572 20,571 Total deferred tax asset 3,218,558 3,645,155 Valuation allowance (3,203,607 ) (3,620,363 ) Net deferred tax asset $ - $ - |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Significant Assumptions Used in Option-pricing Model to Fair Value Options Granted | Significant assumptions used in the option-pricing model to fair value options granted were as follows: 2018 Risk-free rate 2.65 % Expected life 6 years Expected volatility 108.00 % Expected dividend — 2017 Risk-free rate 2.27 % Expected life 6 years Expected volatility 50.00 % Expected dividend — |
Summary of Stock Option Plan Activity | The following is a summary of the stock option plan activity during 2018 and 2017: 2018 2017 Number of Weighted Average Number of Weighted Average Options Exercise Price Options Exercise Price Options Outstanding at Beginning of the year 11,290 $ 111.07 21,537 $ 113.80 Granted 10,000 10.00 2,500 125.00 Exercised - - - - Adjustment 1,010 125.00 793 125.00 Forfeited (3,000 ) 120.83 (13,540 ) 125.00 Options Outstanding at End of Year 19,300 $ 57.91 11,290 $ 11.11 Options Exercisable at End of Year 6,630 $ 105.68 6,290 $ 103.30 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Carrying Amount and Estimated Fair Value of Finance Receivables | The carrying amount and estimated fair value of finance receivables at December 31 are as follows: 2018 2017 Carrying Fair Carrying Fair Amount Value Amount Value Finance receivables: Original product $ 425,000 $ 4,005,000 $ 638,000 $ 5,705,000 Special product, net of allowance (1) 237,000 543,000 339,000 890,000 (1) New Neighbor Guaranty program |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional information (Detail) | Jan. 15, 2019USD ($) | Nov. 02, 2018USD ($) | Oct. 15, 2018$ / sharesshares | Apr. 02, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)Ownership$ / shares$ / Assessmentshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2014 | Nov. 30, 2018shares | Oct. 31, 2018$ / sharesshares | Oct. 16, 2018shares | Oct. 14, 2018shares |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Provision for credit losses | $ 581 | $ 141,286 | |||||||||
Principal amount | 42,875 | ||||||||||
Capitalized real estate costs, net of accumulated depreciation | 122,604 | 196,707 | |||||||||
Depreciation expense | 45,577 | 46,342 | |||||||||
Debt issuance costs incurred | 291,760 | ||||||||||
Settlement costs with associations | 40,027 | 269,576 | |||||||||
Valuation allowance deferred tax assets | $ 3,203,607 | $ 3,620,363 | |||||||||
Common stock, shares issued | shares | 3,124,961 | 625,318 | 2,500,000 | ||||||||
Reverse stock split, description | one-for-ten | one-for-ten | |||||||||
Reverse stock split, conversion ratio | 0.1 | ||||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Common stock, shares outstanding | shares | 625,318 | 3,124,961 | 625,318 | 625,319 | 6,253,189 | ||||||
Interest settled with common shares | $ 180,585 | ||||||||||
Purchase of insurance policies | $ 85,000 | 78,000 | |||||||||
Stock Warrants [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Common stock shares issuable upon exercise of warrants | shares | 40,000 | 143,587 | |||||||||
Warrants, price per share | $ / shares | $ 6.605 | $ 1.84 | |||||||||
Promissory Notes [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Settlement of debt including accrued interest and other charges | $ 4,720,860 | ||||||||||
Settlement of debt in exchange of shares | shares | 2,953,189 | ||||||||||
Securities Purchase Agreement [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Common stock shares issuable upon exercise of warrants | shares | 40,000 | ||||||||||
Warrants, price per share | $ / shares | $ 3.87 | ||||||||||
Fair value of warrants | $ 154,676 | ||||||||||
Securities Purchase Agreement [Member] | Stock Warrants [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Stock price | $ / shares | $ 7.40 | ||||||||||
Debt discount, amortization period | 6 months | ||||||||||
Interest expense | $ 154,676 | ||||||||||
Securities Purchase Agreement [Member] | Volatility [Member] | Stock Warrants [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Warrants, assumptions | 100.6 | ||||||||||
Securities Purchase Agreement [Member] | Expected Term [Member] | Stock Warrants [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Warrants, assumptions | 5 | ||||||||||
Securities Purchase Agreement [Member] | Risk-free Interest Rate [Member] | Stock Warrants [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Warrants, assumptions | 2.55 | ||||||||||
Securities Purchase Agreement [Member] | Senior Convertible Promissory Note [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Principal amount | $ 1,500,000 | ||||||||||
Purchase price of notes issued | $ 1,500,000 | ||||||||||
Debt instrument maturity period | 360 days | ||||||||||
Debt instrument, interest rate percentage | 3.00% | ||||||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | IIU Inc. [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Percentage of stock purchased | 100.00% | ||||||||||
Purchase price | $ 5,075,000 | ||||||||||
Special Product [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Delinquent assessments maximum due period purchases basis | 48 months | ||||||||||
Original Product [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Allowance for credit losses | $ 125,000 | $ 194,000 | |||||||||
Minimum [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 20 years | ||||||||||
Minimum [Member] | First Mortgage [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 3 years | ||||||||||
Subsidiaries [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Number of members | Ownership | 2 | ||||||||||
Maximum statutory delinquent assessments rate | 18.00% | ||||||||||
Maximum administrative late fees | $ / Assessment | 25 | ||||||||||
Percentage of maximum administrative late fees on delinquent assessment | 5.00% | ||||||||||
Minimum acquisition cost that requires capitalization to fixed assets | $ 500 | ||||||||||
Capitalized software costs, net of accumulated amortization | 21,951 | 45,210 | |||||||||
Amortization expense for capitalized software costs | 23,259 | 23,259 | |||||||||
Unamortized debt issue costs | 0 | 0 | |||||||||
Debt issuance costs incurred | 291,760 | ||||||||||
Settlement costs with associations | 40,027 | 269,576 | |||||||||
Fair value of properties | $ 0 | 0 | |||||||||
Subsidiaries [Member] | Capitalized Software [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful life | 5 years | ||||||||||
Subsidiaries [Member] | Securities Purchase Agreement [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Term of warrants issued | 5 years | ||||||||||
Common stock shares issuable upon exercise of warrants | shares | 40,000 | ||||||||||
Subsidiaries [Member] | Securities Purchase Agreement [Member] | Senior Convertible Promissory Note [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Principal amount | $ 500,000 | ||||||||||
Purchase price of notes issued | $ 500,000 | ||||||||||
Debt instrument maturity period | 6 months | ||||||||||
Debt instrument, interest rate percentage | 10.50% | ||||||||||
Subsidiaries [Member] | HealthCare Abroad [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Age limit | 84 years | ||||||||||
Subsidiaries [Member] | HealthCAre Global [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Age limit | 70 years | ||||||||||
Subsidiaries [Member] | HealthCare America [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Age limit | 70 years | ||||||||||
Subsidiaries [Member] | HealthCare International [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Age limit | 70 years | ||||||||||
Subsidiaries [Member] | HealthCare War [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Age limit | 70 years | ||||||||||
Subsidiaries [Member] | Special Product [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Delinquent assessments maximum due period purchases basis | 48 months | ||||||||||
Allowance for credit losses | $ 40,758 | 51,230 | |||||||||
Subsidiaries [Member] | Original Product [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Allowance for credit losses | 194,000 | ||||||||||
Provision for credit losses | 141,286 | ||||||||||
Deferred loan origination fees | $ 52,714 | ||||||||||
Subsidiaries [Member] | Maximum [Member] | Furniture [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 5 years | ||||||||||
Subsidiaries [Member] | Maximum [Member] | Computer [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 5 years | ||||||||||
Subsidiaries [Member] | Maximum [Member] | Office Equipment [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 5 years | ||||||||||
Subsidiaries [Member] | Maximum [Member] | HealthCAre Global [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Coverage period | 6 months | ||||||||||
Subsidiaries [Member] | Maximum [Member] | HealthCare America [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Coverage period | 90 days | ||||||||||
Subsidiaries [Member] | Maximum [Member] | HealthCare War [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Coverage period | 6 months | ||||||||||
Subsidiaries [Member] | Minimum [Member] | Furniture [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 3 years | ||||||||||
Subsidiaries [Member] | Minimum [Member] | Computer [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 3 years | ||||||||||
Subsidiaries [Member] | Minimum [Member] | Office Equipment [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Estimated useful lives | 3 years | ||||||||||
REO Management Holdings, LLC [Member] | Maximum [Member] | Subsidiary Limited Liability [Member] | |||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||
Percentage of ownership in subsidiary limited liability companies | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Anti-dilutive Stock Based Compensation Awards (Detail) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive stock based compensation awards | 19,300 | 11,290 |
Stock Warrants – Number of Shares to Purchase [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive stock based compensation awards | 2,763,387 | 120,000 |
Finance Receivables - Origina_3
Finance Receivables - Original Product - Schedule of Finance Receivables for Original Product (Detail) - Original Product [Member] | 12 Months Ended | |
Dec. 31, 2018USD ($)Unit | Dec. 31, 2017USD ($)Unit | |
Accounts Notes And Loans Receivable [Line Items] | ||
Finance receivables outstanding | $ 550,000 | $ 832,000 |
Reserve for credit losses | (125,000) | (194,000) |
Finance receivables, net | $ 425,000 | $ 638,000 |
Number of active units with delinquent assessments | Unit | 826 | 1,162 |
Amount of outstanding interest and late fees on active units | $ 11,268,000 | $ 14,600,000 |
Funded During The Current Year [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Finance receivables outstanding | 79,000 | 118,000 |
1-2 Years Outstanding [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Finance receivables outstanding | 35,000 | 38,000 |
2-3 Years Outstanding [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Finance receivables outstanding | 18,000 | 12,000 |
3-4 Years Outstanding [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Finance receivables outstanding | 7,000 | 24,000 |
Greater Than 4 Years Outstanding [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Finance receivables outstanding | $ 411,000 | $ 640,000 |
Finance Receivables - Special_3
Finance Receivables - Special Product (New Neighbor Guaranty program) - Additional Information (Detail) - Special Product [Member] | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Accounts Notes And Loans Receivable [Line Items] | |
Delinquent assessments maximum due period purchases basis | 48 months |
Maximum future contingent payments | $ 249,000 |
Finance Receivables - Special_4
Finance Receivables - Special Product (New Neighbor Guaranty program) - Schedule of Delinquent Assessments and Accrued Charges (Detail) - Special Product [Member] | 12 Months Ended | |
Dec. 31, 2018USD ($)Unit | Dec. 31, 2017USD ($)Unit | |
Accounts Notes And Loans Receivable [Line Items] | ||
Finance receivables, net | $ 237,000 | $ 339,000 |
Delinquent assessments | 707,000 | 1,200,000 |
Accrued interest and late fees | $ 465,000 | $ 728,000 |
Number of active units with delinquent assessments | Unit | 58 | 97 |
New Neighbor Guaranty (NNG) A_2
New Neighbor Guaranty (NNG) Allowance for Credit Losses - Additional Information (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
New Neighbor Guaranty (NNG) [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Allowance for credit losses | $ 41,000 | $ 51,000 |
Real Estate Assets Owned - Addi
Real Estate Assets Owned - Additional Information (Detail) | 12 Months Ended | |
Dec. 31, 2018USD ($)Property | Dec. 31, 2017USD ($)Property | |
Real Estate [Abstract] | ||
Real estate assets owned | $ 122,604 | $ 196,707 |
Number of units in real estate assets owned | Property | 1 | 2 |
Number of units, net of disposals in real estate assets owned capitalized | Property | 0 | 1 |
Real estate assets owned capitalized at fair value less cost for disposal | $ 0 | $ 0 |
Real estate portfolio, number of units | Property | 20 | 66 |
Number of units sold | Property | 27 | 18 |
Proceeds from sale of units | $ 196,000 | $ 797,000 |
Gain or loss on disposal of real estate assets | 0 | 0 |
Rental revenues | 513,000 | 737,000 |
Net of cost recovery | 10,000 | 73,000 |
Monthly contingent obligation for assessments due to associations | $ 9,000 | $ 23,000 |
Long-Term Debt and Other Fina_3
Long-Term Debt and Other Financing Arrangements - Schedule of Debt (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Notes payable | $ 42,875 | $ 39,028 |
Financing agreement with FlatIron capital maturing in May 31, 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 42,875 | |
Financing agreement with FlatIron capital maturing in May 31, 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Notes payable | $ 39,028 |
Long-Term Debt and Other Fina_4
Long-Term Debt and Other Financing Arrangements - Schedule of Debt (Parenthetical) (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Financing agreement with FlatIron capital maturing in May 31, 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Down payment for note payable | $ 28,125 | |
Debt instrument, periodic payment | $ 8,701 | |
Debt instrument due period | 10 months | |
Debt instrument, maturity date | May 31, 2019 | |
Debt instrument, interest rate percentage | 5.99% | |
Financing agreement with FlatIron capital maturing in May 31, 2018 [Member] | ||
Debt Instrument [Line Items] | ||
Down payment for note payable | $ 16,500 | |
Debt instrument, periodic payment | $ 9,610 | |
Debt instrument due period | 10 months | |
Debt instrument, maturity date | May 31, 2018 | |
Debt instrument, interest rate percentage | 5.25% |
Long-Term Debt and Other Fina_5
Long-Term Debt and Other Financing Arrangements - Additional Information (Detail) - USD ($) | Nov. 02, 2018 | Oct. 05, 2018 |
Common Stock Purchase Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Commitment fee paid | $ 200,000 | |
Securities Purchase Agreement [Member] | Senior Convertible Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Repayments of notes payable including accrued interest | $ 500,000 |
Long-Term Debt and Other Fina_6
Long-Term Debt and Other Financing Arrangements - Schedule of Principal Payments of Debt (Detail) | Dec. 31, 2018USD ($) |
Debt Instruments [Abstract] | |
2019 | $ 42,875 |
Principal amount | $ 42,875 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Operating lease ending date | Jul. 31, 2019 | |
Operating lease beginning date | Mar. 1, 2014 | |
Rent expense | $ 108,000 | $ 161,000 |
Accrued costs of Settlement Agreement | 100,000 | 505,000 |
Reimburse to Plaintiff's opposing counsel | 99,000 | |
Litigation settlement agreement, gain recorded to | $ 405,000 | $ (505,000) |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Lease Payment Due - (Detail) | Dec. 31, 2018USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2019 | $ 202,051 |
Total future minimum lease payments | $ 202,051 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||||
Valuation allowance | $ 3,203,607 | $ 3,620,363 | ||
Combined federal and state statutory rate | 25.30% | 37.60% | ||
U.S. and Various State Authorities [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Taxe examination, year under examination | 2015 2016 2017 2018 | |||
Predecessor [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net deferred tax asset | $ 91,068 | |||
Redemption consideration, taxable gain | 5,250,000 | |||
Fresh-start adjustment, increase in equity | 1,970,000 | |||
Predecessor [Member] | Federal [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 1,060,000 | $ 2,977,000 | $ 3,850,000 | $ 512,000 |
Net operating loss carryforwards expiration period | 2037 | 2036 | 2035 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Taxes (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax benefit | ||
Federal | $ (222,603) | $ (1,690,948) |
State | (46,058) | (220,735) |
Total current tax benefit | (268,661) | (1,911,683) |
Deferred tax expense | 685,416 | (31,974) |
Rate change adjustment | 1,754,830 | |
Valuation allowance (expense) | $ (416,755) | 3,620,363 |
Income tax (reduction) benefit | $ 3,431,536 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Tax Provision with Expected Provision (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Benefit on net loss | $ 413,361 | $ (1,955,121) |
Nondeductible expenses | 3,394 | 11,464 |
Rate change adjustment | 1,754,830 | |
Valuation allowance (expense) | $ (416,755) | 3,620,363 |
Income tax (reduction) benefit | $ 3,431,536 | |
Benefit on net loss, percentage | 87.50% | 37.60% |
Nondeductible expenses, percentage | 0.70% | (0.20%) |
Rate change adjustment, percentage | 0.00% | (33.80%) |
Valuation allowance (expense), percentage | (88.00%) | (69.70%) |
Other items, percentage | 0.00% | 0.00% |
Tax benefit/effective rate, percentage | 0.00% | (66.10%) |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax liabilities: | ||
Tax expense for internally developed software | $ 9,976 | $ 15,871 |
Tax depreciation in excess of book | 4,975 | 8,921 |
Total deferred tax liabilities | 14,951 | 24,792 |
Deferred tax assets: | ||
Loss carryforwards | 2,156,428 | 2,393,172 |
Stock option expense | 87,056 | 80,778 |
Step up in basis - purchase of non-controlling interest | 59,243 | 63,890 |
Allowance for credit losses | 41,849 | 62,154 |
Accrued liabilities | 20,572 | 20,571 |
Total deferred tax asset | 3,218,558 | 3,645,155 |
Valuation allowance | (3,203,607) | (3,620,363) |
C Corporation [Member] | ||
Deferred tax assets: | ||
Step up in basis at contribution | $ 853,410 | $ 1,024,590 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | Oct. 31, 2018USD ($)$ / sharesshares | Oct. 15, 2018USD ($)$ / sharesshares | May 29, 2018USD ($)$ / sharesshares | Nov. 29, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Oct. 16, 2018shares | Oct. 14, 2018shares | Apr. 02, 2018$ / sharesshares | Oct. 23, 2015$ / sharesshares |
Class Of Stock [Line Items] | ||||||||||
Loss on settlement of debt exchange | $ (604,779) | |||||||||
Reverse stock split, description | one-for-ten | one-for-ten | ||||||||
Reverse stock split, conversion ratio | 0.1 | |||||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Common stock, shares outstanding | shares | 625,318 | 3,124,961 | 625,318 | 625,319 | 6,253,189 | |||||
Buyback of treasury share | shares | 357 | |||||||||
Value of treasury shares repurchased | $ 1,894 | |||||||||
Common stock issued | shares | 2,500,000 | |||||||||
Proceeds from issuance of common stock | $ 5,200,000 | $ 5,206,273 | ||||||||
Offering costs | $ 200,000 | |||||||||
Number of options granted | shares | 10,000 | 2,500 | ||||||||
Weighted average exercise price of options | $ / shares | $ 10 | $ 125 | ||||||||
Options granted, weighted average grant date fair value | $ / shares | $ 4.68 | $ 2.90 | ||||||||
Recognized compensation expense of stock options | $ 25,000 | $ 29,000 | ||||||||
Remaining unrecognized compensation cost | $ 32,000 | $ 37,000 | ||||||||
Stock options remaining life, years | 7 years | 8 years | ||||||||
Aggregate intrinsic value of outstanding common stock options | $ 0 | $ 0 | ||||||||
Options Issued Prior to 2017 [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Recognized compensation expense of stock options | $ 18,000 | $ 28,800 | ||||||||
Employee [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of options granted | shares | 2,500 | |||||||||
Weighted average exercise price of options | $ / shares | $ 125 | |||||||||
Vesting period of stock options | 3 years | |||||||||
Maximum term of an option from the date of grant | 10 years | |||||||||
Options granted, weighted average grant date fair value | $ / shares | $ 0.29 | |||||||||
Recognized compensation expense of stock options | $ 5,800 | |||||||||
Employee Two [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Number of options granted | shares | 10,000 | |||||||||
Weighted average exercise price of options | $ / shares | $ 10 | |||||||||
Vesting period of stock options | 3 years | |||||||||
Maximum term of an option from the date of grant | 10 years | |||||||||
Options granted, weighted average grant date fair value | $ / shares | $ 4.68 | |||||||||
Recognized compensation expense of stock options | $ 35,000 | |||||||||
Stock Warrants [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants issued to purchase of common stock | shares | 143,587 | 40,000 | ||||||||
Warrants issued to purchase of common stock average exercise price per share | $ / shares | $ 1.84 | $ 6.605 | ||||||||
Warrants, year of expiration | 2023 | |||||||||
Warrants, average remaining life | 4 years 3 months | |||||||||
Stock Warrants [Member] | Initial Public Offering [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Reverse stock split, description | one-tenth | |||||||||
Warrants issued to purchase of common stock | shares | 120,000 | |||||||||
Warrants issued to purchase of common stock average exercise price per share | $ / shares | $ 12.50 | $ 125 | ||||||||
Warrants, weighted average price | $ / shares | $ 12.50 | |||||||||
Warrants, weighted average remaining life | 1 year 9 months 21 days | 2 years 11 months 8 days | ||||||||
Warrants, year of expiration | 2020 | |||||||||
Warrants, aggregate intrinsic value outstanding | $ 0 | $ 0 | ||||||||
Stock Warrants [Member] | Secondary Offering [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Warrants issued to purchase of common stock | shares | 2,500,000 | |||||||||
Warrants issued to purchase of common stock average exercise price per share | $ / shares | $ 2.40 | |||||||||
Warrants, year of expiration | 2023 | |||||||||
Warrants, average remaining life | 4 years 9 months 18 days | |||||||||
Promissory Notes [Member] | ||||||||||
Class Of Stock [Line Items] | ||||||||||
Settlement of debt including accrued interest and other charges | $ 4,720,860 | |||||||||
Settlement of debt in exchange of shares | shares | 2,953,189 | |||||||||
Settlement of debt in exchange of shares, value | $ 5,325,639 | |||||||||
Loss on settlement of debt exchange | $ 604,779 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Significant Assumptions Used in Option-pricing Model to Fair Value Options Granted (Detail) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | ||
Risk-free rate | 2.65% | 2.27% |
Expected life | 6 years | 6 years |
Expected volatility | 108.00% | 50.00% |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Option Plan Activity (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Options | ||
Number of Options, Outstanding at Beginning of the year | 11,290 | 21,537 |
Number of Options, Granted | 10,000 | 2,500 |
Number of Options, Adjustment | 1,010 | 793 |
Number of Options, Forfeited | (3,000) | (13,540) |
Number of Options, Outstanding at End of Year | 19,300 | 11,290 |
Number of Options, Exercisable at End of Year | 6,630 | 6,290 |
Weighted Average Exercise Price | ||
Weighted Average Exercise Price, Outstanding at Beginning Balance | $ 11.11 | $ 113.80 |
Weighted Average Exercise Price, Granted | 10 | 125 |
Weighted Average Exercise Price, Adjustment | 125 | 125 |
Weighted Average Exercise Price, Forfeited | 120.83 | 125 |
Weighted Average Exercise Price, Outstanding at Ending Balance | 57.91 | 11.11 |
Weighted Average Exercise Price, Exercisable | $ 105.68 | $ 103.30 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) | Jan. 02, 2017USD ($)$ / Unit | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Related Party Transaction [Line Items] | |||
Receivable from related party | $ 25,507 | ||
Subsidiaries [Member] | |||
Related Party Transaction [Line Items] | |||
Recoveries incurred | 278,000 | $ 331,000 | |
Collection from property owners | 984,000 | 1,136,000 | |
Business Law Group [Member] | |||
Related Party Transaction [Line Items] | |||
Monthly payment for cases | $ 82,000 | ||
Minimum fee paid per unit | $ / Unit | 700 | ||
Receivables from property owners ultimately payable to law firm | 2,753,000 | 3,657,000 | |
Reserve balance due to related parties | 1,400,000 | ||
Receivable from related party | 25,500 | 0 | |
Repayment received from related party | 252,771 | ||
Payments of additional compensation | 150,000 | ||
Business Law Group [Member] | Out of Pocket Collection Costs [Member] | |||
Related Party Transaction [Line Items] | |||
Expenses incurred by company | $ 297,000 | $ 560,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Detail) - Level 3 [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Measurement Input, Discount Rate [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fair value measurement discount rate | 0.0865 | 0.0795 |
Measurement Input, Expected Term [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Fair value measurement recovery period | 8 years 6 months | 8 years 6 months |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of Carrying Amount and Estimated Fair Value of Finance Receivables (Detail) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Finance receivables: | ||
Original product | $ 425,012 | $ 637,937 |
Special product, net of allowance | 237,043 | 339,471 |
Level 3 [Member] | Carrying Amount [Member] | ||
Finance receivables: | ||
Original product | 425,000 | 638,000 |
Special product, net of allowance | 237,000 | 339,000 |
Level 3 [Member] | Fair Value [Member] | ||
Finance receivables: | ||
Original product | 4,005,000 | 5,705,000 |
Special product, net of allowance | $ 543,000 | $ 890,000 |
Management's Plan - Additional
Management's Plan - Additional Information (Detail) - USD ($) | Apr. 15, 2019 | Oct. 30, 2018 | Dec. 31, 2017 | Jan. 16, 2019 | Dec. 31, 2018 |
Financial Support For Nonconsolidated Legal Entity [Line Items] | |||||
Cumulative operating losses | $ 11,490,000 | ||||
Net proceeds from secondary public offering | $ 5,400,000 | ||||
Promissory Notes [Member] | |||||
Financial Support For Nonconsolidated Legal Entity [Line Items] | |||||
Repayments of notes payable including accrued interest and other costs | $ 4,720,860 | ||||
Debt Instrument, due | 2018-04 | ||||
Repayments of notes payable, in exchange of common shares | 2,953,189 | ||||
Repayments of notes | $ 717,500 | ||||
Convertible Promissory Note [Member] | Subsequent Event [Member] | |||||
Financial Support For Nonconsolidated Legal Entity [Line Items] | |||||
Face amount of debt instrument | $ 3,582,613 | ||||
Debt instrument term | 12 months |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - USD ($) | Apr. 15, 2019 | Jan. 15, 2019 | Jan. 16, 2019 |
Convertible Promissory Note [Member] | |||
Subsequent Event [Line Items] | |||
Face amount of debt instrument | $ 3,582,613 | ||
Debt instrument term | 12 months | ||
IIU Inc. [Member] | Promissory Notes [Member] | |||
Subsequent Event [Line Items] | |||
Extinguishment of principal indebtedness and accrued interest | $ 1,507,387 | ||
IIU Inc. [Member] | Convertible Promissory Note [Member] | |||
Subsequent Event [Line Items] | |||
Face amount of debt instrument | $ 3,582,613 | ||
Debt instrument, interest rate percentage | 3.00% | ||
Debt instrument term | 12 months | 360 days | |
Denominator for conversion of convertible note to restricted common shares | $ 2.41 | ||
IIU Inc. [Member] | Securities Purchase Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Percentage of stock purchased | 100.00% | ||
Purchase price | $ 5,075,000 | ||
Minimum required net working capital | 15,000 | ||
IIU Inc. [Member] | Securities Purchase Agreement [Member] | Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Cash requriement | $ 152,000 |