Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 22, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | SCWorx Corp. | |
Entity Central Index Key | 0001674227 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Trading Symbol | WORX | |
Entity Common Stock, Shares Outstanding | 6,573,342 | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 2,765,290 | $ 76,459 |
Accounts receivable | 769,030 | 520,692 |
Interest expense receivable | 0 | 121,350 |
Prepaid expenses and other assets | 374,257 | 0 |
Convertible notes receivable, at fair value | 0 | 837,317 |
Investment in warrants, at fair value | 0 | 67,000 |
Total current assets | 3,908,577 | 1,622,818 |
Fixed assets | 27,932 | 0 |
Intangible assets | 233,676 | 0 |
Goodwill | 8,466,282 | 0 |
Due from shareholder | 0 | 1,409,284 |
TOTAL ASSETS | 12,636,467 | 3,032,102 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,293,165 | 855,759 |
Contract liabilities | 811,922 | 816,714 |
Notes payable related party | 192,446 | 0 |
Current liabilities - discontinued operations | 2,623 | 0 |
Total current liabilities | 2,300,156 | 1,672,473 |
Notes payable - related party | 0 | 1,591,491 |
TOTAL LIABILITIES | 2,300,156 | 3,263,964 |
Commitments and contingencies | ||
Stockholders' Equity\(Deficit): | ||
Preferred stock, 900,000 shares authorized; 816,638 and 0 shares issued and outstanding, respectively | 7,955,945 | 0 |
Common stock, $.001 par value; 10,000,000 shares authorized; 6,563,195 and 5,838,149 shares issued and outstanding, respectively | 6,563 | 5,838 |
Additional paid-in capital | 9,570,485 | 1,244,273 |
Accumulated deficit | (7,196,682) | (1,481,973) |
TOTAL STOCKHOLDERS' EQUITY\(DEFICIT) | 10,366,311 | (231,862) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 12,636,467 | $ 3,032,102 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Preferred Stock, Shares Authorized | 900,000 | 900,000 |
Preferred Stock, Shares Issued | 816,638 | 0 |
Preferred Stock, Shares Outstanding | 816,638 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Common Stock, Shares, Issued | 6,563,195 | 5,838,149 |
Common Stock, Shares, Outstanding | 6,563,195 | 5,838,149 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | $ 1,248,104 | $ 786,104 |
Cost of revenue | (788,870) | (793,225) |
Gross margin | 459,234 | (7,121) |
Operating expenses: | ||
General and administrative | 6,627,939 | 135,516 |
Research and development | 182,339 | 0 |
Total operating expenses | 6,810,278 | 135,516 |
Loss from operations | (6,351,044) | (142,637) |
Other income | 465,055 | 0 |
Interest expense | (23,720) | (41,623) |
Loss before taxes | (5,909,709) | (184,260) |
Income tax expense (benefit) | (195,000) | 0 |
Net loss | $ (5,714,709) | $ (184,260) |
Loss per share: | ||
Basic and diluted | $ (1.27) | $ (0.04) |
Weighted average number of shares used in per share calculation, basic and diluted | 4,492,919 | 4,476,013 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Changes In Stockholders' Equity\Deficit - USD ($) | Total | Members' Deficit [Member] | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2017 | $ (1,101,259) | $ (1,101,259) | $ 0 | $ 0 | $ 0 | $ 0 |
Beginning Balance (in shares) at Dec. 31, 2017 | 17,500 | |||||
Stock and warrant dividend | 0 | |||||
Net loss | (184,260) | $ (184,260) | 0 | 0 | 0 | 0 |
Ending Balance at Mar. 31, 2018 | (1,285,519) | $ (1,285,519) | 0 | 0 | 0 | 0 |
Ending Balance (in shares) at Mar. 31, 2018 | 17,500 | |||||
Beginning Balance at Dec. 31, 2018 | (231,862) | $ 0 | $ 5,838 | 1,244,273 | (1,481,973) | |
Beginning Balance (in shares) at Dec. 31, 2018 | 0 | 5,838,149 | ||||
CEO surrender of common shares in settlement of due from shareholder balance | (1,608,833) | $ 0 | $ (575) | (1,608,258) | 0 | |
CEO surrender of common shares in settlement of due from shareholder balance (in shares) | 0 | (574,991) | ||||
Series A Preferred share issuance (Alliance MMA) | 5,980,945 | $ 5,980,945 | $ 0 | 0 | 0 | |
Series A Preferred share issuance (Alliance MMA) (in shares) | 619,138 | 0 | ||||
Issuance of common stock | 5,884,361 | $ 0 | $ 1,283 | 5,883,078 | 0 | |
Issuance of common stock (in shares) | 0 | 1,283,124 | ||||
Series A Preferred share issuance | 75,000 | $ 75,000 | $ 0 | 0 | 0 | |
Series A Preferred share issuance (in shares) | 7,500 | 0 | ||||
Conversion of convertible notes payable - related party into Series A Preferred share issuance | 1,900,000 | $ 1,900,000 | $ 0 | 0 | 0 | |
Conversion of convertible notes payable - related party into Series A Preferred share issuance (in shares) | 190,000 | |||||
Exercise of warrants | 61,023 | $ 0 | $ 10 | 61,013 | 0 | |
Exercise of warrants (in shares) | 9,891 | |||||
Issuance of warrants in settlement of lease dispute | 66,275 | 0 | $ 0 | 66,275 | 0 | |
Shares issued in cashless exercise of warrants | 0 | 0 | $ 4 | (4) | 0 | |
Shares issued in cashless exercise of warrants (in shares) | 3,732 | |||||
Stock based compensation related to founders transfer of common shares to contractors | 5,322,930 | 0 | $ 0 | 5,322,930 | 0 | |
Stock based compensation related to employee and contractor equity awards | 306,903 | 0 | $ 3 | 306,900 | 0 | |
Stock based compensation related to employee and contractor equity awards (in shares) | 3,290 | |||||
Stock and warrant dividend | (1,705,722) | 0 | $ 0 | (1,705,722) | 0 | |
Net loss | (5,714,709) | 0 | 0 | 0 | (5,714,709) | |
Ending Balance at Mar. 31, 2019 | $ 10,366,311 | $ 7,955,945 | $ 6,563 | $ 9,570,485 | $ (7,196,682) | |
Ending Balance (in shares) at Mar. 31, 2019 | 816,638 | 6,563,195 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (5,714,709) | $ (184,260) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 451 | 0 |
Stock-based compensation | 5,629,833 | 0 |
Amortization of acquired intangibles | 6,324 | 0 |
Gain on change in fair value of warrant assets | (55,000) | 0 |
Gain on change in fair value of convertible notes receivable | (531,405) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (248,338) | 65,047 |
Prepaid expenses and other assets | (252,907) | 0 |
Accounts payable and accrued liabilities | (1,083,263) | (44,131) |
Contract liabilities | (4,792) | 168,911 |
Net cash (used in) provided by operating activities of continuing operations | (2,253,806) | 5,567 |
Net cash (used in) operating activities of discontinued operations | (311,891) | 0 |
Net cash (used in) operating activities | (2,565,697) | 5,567 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash acquired in reverse acquisition | 5,441,437 | 0 |
Advances to due from shareholder | (199,549) | (587,053) |
Advances on convertible notes receivable - Alliance MMA | (215,000) | 0 |
Purchases of fixed assets | (28,383) | 0 |
Net cash provided by (used in) investing activities | 4,998,505 | (587,053) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from notes payable - related parties | 120,000 | 591,600 |
Proceeds from preferred stock placement | 75,000 | 0 |
Proceeds from exercise of warrants | 61,023 | 0 |
Net cash provided by financing activities | 256,023 | 591,600 |
NET INCREASE IN CASH | 2,688,831 | 10,114 |
CASH - BEGINNING OF PERIOD | 76,459 | 15,159 |
CASH - END OF PERIOD | 2,765,290 | 25,273 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest | 0 | 0 |
Cash paid for taxes | 0 | 0 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of warrant in settlement of vendor liability | 66,275 | 0 |
Cashless exercise of warrant | 4 | 0 |
Surrender of common shares in settlement of due from shareholder balance | 1,608,833 | 0 |
Stock and warrant dividend | 1,705,722 | 0 |
Warrants issued to company | 19,000 | 0 |
Conversion of notes payable-related party into Series A Preferred Shares | 1,900,000 | 0 |
Issuance of preferred and common stock in connection with acquisition of Alliance MMA, net of cash | $ 6,423,869 | $ 0 |
Description of Business
Description of Business | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | Note 1. Description of Business Nature of Business SCWorx, LLC (“SCW LLC”) was a privately held limited liability company which was organized in Florida on November 17, 2016. On December 31, 2017, SCW LLC acquired its wholly owned subsidiary, Primrose Solutions, LLC, (“Primrose”), a Delaware limited liability company focused on developing functionality within the SCWorx software. The majority shareholders of Primrose were shareholders of SCWorx LLC and based upon Staff Accounting Bulletin (“SAB”) Topic 5G, the technology acquired has been accounted for at predecessor cost of $0. To facilitate the planned acquisition by Alliance MMA, Inc, on June 27, 2018, SCWorx, LLC, merged with and into a newly formed SCWorx Acquisition Corp., a Delaware corporation, with SCWorx Acquisition Corp. being the surviving entity. Subsequently, on August 17, 2018, SCWorx Acquisition Corp. changed its name to SCWorx Corp. (the “Company” or “SCWorx”). On November 30, 2018 the Company and certain shareholders agreed to cancel 6,510 common shares and the Company issued 3,125 shares of common stock to new third-party investors for $1.25 million in cash. In addition, on February 1, 2019, SCWorx Corp. (f/k/a SCWorx Acquisition Corp.) changed its name to SCW FL Corp. Business Combination and Related Transactions In June 2018, SCWorx Acquisition Corp. entered into a Securities Purchase Agreement (“SPA”) with Alliance MMA, Inc. (“Alliance”), as amended December 18, 2018, under which the SCW LLC agreed to purchase up to $1.25 million in principal amount of Alliance’s convertible notes and warrants to purchase up to 1,128,356 [59,387 shares reflective of one for nineteen stock split] shares of Alliance common stock. The initial $750,000 tranche of the notes was convertible into shares of Alliance common stock at an initial conversion price of $0.3725 [$7.0775 post-split] and the related 503,356 [26,492 post-split] warrants have an exercise price of $0.3725 [$7.0775 post-split]. The conversion price on the $750,000 convertible note was reduced to $0.215 [$4.085 post-split] per share in January 2019. The remaining $500,000 tranche of the notes is convertible into shares of Alliance common stock at a conversion price of $0.20 [$3.80 post-split] and the related 625,000 [32,895 post-split] warrants have an exercise price of $0.30 [$5.70 post-split]. All of these notes (an aggregate of $1.25 million in principal amount) converted automatically into Alliance common stock upon the closing of the Company’s acquisition on February 1, 2019 and were distributed to certain of the Company’s common shareholders. Pursuant to the SPA, between June 29, 2018 and October 16, 2018, Alliance sold the Company convertible notes in the aggregate principal amount of $750,000 and warrants to purchase 503,356 [26,492 post-split] shares of Alliance common stock, for an aggregate purchase price of $750,000. Each of the notes bears interest at 10% annually and have a one year term. The warrants have an exercise price of $0.3725, [$ 7.0775 On August 20, 2018, the Company and its stockholders entered into a Stock Exchange Agreement with Alliance, as amended December 18, 2018 (“SEA”). Under the SEA, the Company’s shareholders agreed to sell all of the issued and outstanding common stock of the Company, in exchange for which Alliance agreed to issue at the closing (i) 100,000,000 shares of Alliance common stock to the Company’s stockholders. Pursuant to the SPA, between November 16, 2018 and December 31, 2018, the Company purchased additional Alliance convertible notes in the aggregate principal amount of $275,000 and warrants to purchase 356,250 [18,750 post-split] shares of Alliance common stock, for an aggregate purchase price of $275,000. Each of the Notes bears interest at 10% annually and matures one year form the issue date. These warrants have an exercise price of $0.30 [$5.70 post-split], a term of five years and were vested upon grant. This brings the total amount funded by the Company to $1,035,000 as of December 31, 2018. In January 2019, SCWorx purchased $215,000 of additional Alliance convertible notes under the aggregate $1,250,000 note purchase agreement. These notes automatically converted into Alliance common stock upon the closing of the Company’s acquisition on February 1, 2019. In January 2019, SCWorx purchased $215,000 of additional AMMA convertible notes under the aggregate $1,250,000 note purchase agreement. In anticipation of the acquisition of the Company, Alliance filed an original listing application with the Nasdaq Capital Market to list the common stock of the combined company. On February 1, 2019, the Nasdaq approved the listing of Alliance’s common stock (on a combined basis with the Company), with the result being that the newly combined company’s common stock is now newly listed on the Nasdaq Capital Market. On February 1, 2019, Alliance MMA completed the acquisition of SCWorx, changed its name to SCWorx Corp., changed its ticker symbol to “WORX”, and effected a one-for-nineteen reverse stock split of its common stock [bracketed amounts represent post-split adjusted shares or per share amounts], which combined the 100,000,000 Alliance shares of common stock issued to the Company’s shareholders into 5,263,158 shares of common stock of the newly combined company. From a legal perspective, Alliance MMA acquired SCWorx FL Corp, and as a result, historical equity awards including stock options and warrants are carried forward at their historical basis. From an accounting perspective, Alliance MMA was acquired by SCWorx FL Corp in a reverse merger and as a result, the Company has completed preliminary purchase accounting for the transaction. Operations of the Business SCWorx is a leading provider of data content and services related to the repair, normalization and interoperability of information for healthcare providers and big data analytics for the healthcare industry. SCWorx has developed and markets health information technology solutions and associated services that improve healthcare processes and information flow within hospitals. SCWorx’s software platform enables healthcare providers to simplify, repair, and organize its data (“data normalization”), allows the data to be utilized across multiple internal software applications (“interoperability”) and provides the basis for sophisticated data analytics (“big data”). SCWorx’s solutions are designed to quickly and accurately improve the flow of information between the existing supply chain ERP systems (“EMR”), clinical systems, and patient billing functions. The software is designed to achieve multiple operational benefits such as supply chain cost reductions, decreased accounts receivables aging, accelerated and more accurate billing, contract optimization, increased supply chain management and cost visibility, synchronous Charge Description Master (“CDM”) and control of vendor rebates and contract administration fees. SCWorx empowers healthcare providers to maintain comprehensive access and visibility to an advanced business intelligence that enables better decision-making and reductions in product costs and utilization, ultimately leading to accelerated and accurate patient billing. SCWorx’s software modules perform separate functions as follows: • Virtualized Item Master File repair, expansion and automation • Charge Description Master Management • Contract Management • Request for Proposal Automation • Rebate Management • Big Data Analytics Model • Data Integration and Warehousing SCWorx continues to provide transformational data-driven solutions to some of the finest, most well-respected healthcare providers in the United States. Clients are geographically dispersed throughout the country. The Company’s focus is to assist healthcare providers with issues they have pertaining to data interoperability. SCWorx provides these solutions through a combination of direct sales and relationships with strategic partners. SCWorx’s software solutions are delivered to clients within a fixed term period, typically a three-to-five-year contracted term, where such software is hosted in SCWorx data centers (Amazon Web Service’s “AWS” or RackSpace) and accessed by the client through a secure connection in a software as a service (“SaaS”) delivery method. SCWorx currently sells its solutions and services in the United States to hospitals and health systems through its direct sales force and its distribution and reseller partnerships. SCWorx, as part of the acquisition of Alliance MMA, operates an online event ticketing platform focused on serving regional MMA promotions. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | Note 2. Liquidity The Company’s primary need for liquidity is to fund the working capital needs of the business and general corporate purposes. The Company has historically incurred losses and has relied on borrowings from members to fund the operations and growth of the business. As of March 31, 2019, the Company had cash of approximately $2,765,000, working capital of approximately $1,780,000, and an accumulated deficit of approximately $8,727,000. During 2018, the Company began to gain traction with more hospitals and witnessed customer renewals of expiring agreements with existing customers. During the first quarter of 2019, the Company signed four contracts with new customers and plan to sign on average, a contract a month, with new customers during 2019. Management expects increases in revenue to provide sufficient cash flow to fund the operations for at least the one-year period following the release of these consolidated financial statements. In 2018, the Company completed a common stock private place of $1.25 million. In the first quarter of 2019, the transactions related to the purchase of Alliance MMA resulted in an increase of cash of $5.4 million which along with increasing sales is expect to fund operations for at least the next 12 months; however, the Company will thereafter need to raise additional funding through strategic relationships, public or private equity or debt financings. If such funding is not available or not available on terms acceptable to the Company, the Company’s current plans for expansion may be curtailed. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 3. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of SCWorx Corp. (f/k/a Alliance MMA) and its wholly-owned subsidiaries, SCW FL Corp and Primrose Solutions, LLC. All significant intercompany balances and transactions are eliminated in consolidation. Cash Cash is maintained with various financial institutions. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. Fair Value of Financial Instruments Management applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Management defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, management considers the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability. Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of accounts receivable, due from shareholder and convertible notes receivable. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company performs ongoing internal credit evaluations of its customers’ financial condition, obtains deposits and limits the amount of credit extended when deemed necessary but generally requires no collateral. The Company believes that any concentration of credit risk in its due from shareholder and convertible notes receivable was substantially mitigated by the shareholder’s material interest in the Company, ability to sell off portions of the interest, if necessary, and the closing of the acquisition of the SCWorx by Alliance and conversion of the notes payable to Series A Preferred share and the settlement of the due from stockholder balance with the surrender of 1,401 SCWorx common shares in January 2019. For the quarter ended March 31, 2019, the Company had two customers representing 24% and 11% of aggregate revenues. For the quarter ended March 31, 2018, the Company had three customers representing 23%, 21% and 15% Allowance for Doubtful Accounts The Company continually monitors customer payments and maintains a reserve for estimated losses resulting from its customers' inability to make required payments. In determining the reserve, the Company evaluates the collectability of its accounts receivable based upon a variety of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations, the Company records a specific allowance against amounts due. For all other customers, the Company recognizes allowances for doubtful accounts based on its historical write-off experience in conjunction with the length of time the receivables are past due, customer creditworthiness, geographic risk and the current business environment. Actual future losses from uncollectible accounts may differ from the Company's estimates. The Company deemed no allowance for doubtful accounts necessary as of March 31, 2019 and December 31, 2018. Leases We determine if an arrangement is a lease at inception. Operating leases are included in the lease right-of-use (“ROU”) assets, current portion and long-term portion of lease obligations on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments to be made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease, which are included in the lease ROU asset when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease components only, none with non-lease components, which are generally accounted for separately. Business Combinations The Company includes the results of operations of the business it acquired in its consolidated results as of the date of acquisition. The Company allocates the fair value of the purchase consideration of its acquisition to the tangible assets, liabilities and intangible assets acquired, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired businesses and the Company. Intangible assets are amortized over their estimated useful lives. The fair value of contingent consideration (earn out) associated with acquisitions is remeasured each reporting period and adjusted accordingly. Acquisition and integration related costs are recognized separately from the business combination and are expensed as incurred. For additional information regarding the Company’s acquisitions, refer to “Note 4 Business Combination.” Goodwill and Identified Intangible Assets Goodwill Identified intangible assets For further discussion of goodwill and identified intangible assets, see “Note 4 – Business Combination Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the related assets’ estimated useful lives. Equipment, furniture and fixtures are being amortized over a period of one to five years. Expenditures that materially increase asset life are capitalized, while ordinary maintenance and repairs are expensed as incurred. Revenue Recognition The Company recognizes revenue in accordance with Topic 606 to depict the transfer of promised goods or services in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of Topic 606 the Company performs the following steps: · Step 1: Identify the contract(s) with a customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligations in the contract · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company follows the accounting revenue guidance under Topic 606 to determine whether contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer. The Company has identified the following performance obligations in its contracts with customers: 1) Data Normalization: which includes data preparation, product and vendor mapping, product categorization, data enrichment and other data related services, 2) Software-as-a-service (“SaaS”): which is generated from clients’ access of and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term, which is usually annually. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period. 3) Maintenance: which includes ongoing data cleansing and normalization, content enrichment, and optimization, and 4) Professional Services: mainly related to specific customer projects to manage and/or analyze data and review for cost reduction opportunities. A contract will typically include Data Normalization, SaaS and Maintenance, which are distinct performance obligations and are accounted for separately. The transaction price is allocated to each separate performance obligation on a relative stand-alone selling price basis. Significant judgement is required to determine the standalone selling price for each distinct performance obligation and is typically estimated based on observable transactions when these services are sold on a standalone basis. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue is recognized when the performance obligation has been met. The Company considers control to have transferred upon delivery because the Company has a present right to payment at that time, the Company has transferred use of the good or service, and the customer is able to direct the use of, and obtain substantially all the remaining benefits from, the good or service provides. The Company’s SaaS and Maintenance contracts typically have termination for convenience without penalty clauses and accordingly, are generally accounted for as month-to-month agreements. If it is determined that the Company has not satisfied a performance obligation, revenue recognition will be deferred until the performance obligation is deemed to be satisfied. Revenue recognition for the Company’s performance obligations are as follows: Data Normalization and Professional Services The Company’s Data Normalization and Professional Services are typically fixed fee. When these services are not combined with SaaS or Maintenance revenues as a single unit of accounting, these revenues are recognized as the services are rendered and when contractual milestones are achieved and accepted by the customer. Software-as-a-Service and Maintenance Software-as-a-service and maintenance revenues are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date the Company’s service is made available to customers. The Company does have some contracts that have payment terms that differ from the timing of revenue recognition which requires us to assess whether the transaction price for those contracts include a significant financing component. The Company has elected the practical expedient that permits an entity to not adjust for the effects of a significant financing component if it expects that at the contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. The Company does not maintain contracts in which the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service exceeds the one-year threshold. In periods prior to the adoption of ASC 606, the Company recognized revenues when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and the collectability of the resulting receivable is reasonably assured. The adoption of Topic 606 did not result in a cumulative effect adjustment to our opening retained earnings since there was no significant impact upon adoption of Topic 606. There was also no material impact to revenues, or any other financial statement line items for the year ended December 31, 2018 as a result of applying ASC 606. The Company has one revenue stream, from the SaaS business, and has not presented any varying factors that affect the nature, timing and uncertainty of revenues and cash flows. There were no revenues that were recognized from performance obligations that were partially satisfied prior to January 1, 2018. Costs to Obtain and Fulfill a Contract Costs to fulfill a contract typically include costs related to satisfying performance obligations as well as general and administrative costs that are not explicitly chargeable to customer contracts. These expenses are recognized and expensed when incurred in accordance with ASC 340-40. Cost of Revenue Cost of revenues primarily represents data center hosting costs, consulting services and maintenance of the Company’s large data array that were incurred in delivering professional services and maintenance of the Company’s large data array during the periods presented. Contract Balances Contract assets arise when the revenue associated prior to the Company’s unconditional right to receive a payment under a contract with a customer (i.e. unbilled revenue) and are derecognized when either it becomes a receivable or the cash is received. If any, contract assets are reported on the consolidated balance sheet. There are no contract assets as of March 31, 2019 and December 31, 2018. Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Contract liabilities were $ 811,922 816,714 Research and Development Costs The Company expenses all research and development related costs as incurred. Research and development cost for the quarters ended March 31, 2019 and 2018 was Advertising Costs The Company expenses advertising costs as incurred. There were no advertising costs for the quarters ended March 31, 2019 and 2018. Income Taxes The Company converted to a corporation from a limited liability company during 2018. The Company uses the asset and liability method of accounting for income taxes in accordance with Accounting Standard Codification (“ASC”) Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For the quarter ended March 31, 2019, the Company has evaluated available evidence and concluded that the Company may not realize all the benefit of its deferred tax assets; therefore, a valuation allowance has been established for its deferred tax assets. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. On December 22, 2017, the Tax Cuts and Jobs Act of 2017, (“the Tax Act”) was enacted. The Tax Act significantly revised the U.S. corporate income tax regime by, including but not limited to, lowering the U.S. corporate income tax rate from 34% to 21% effective January 1, 2018, implementing a territorial tax system, imposing a one-time transition tax on previously untaxed accumulated earnings and profits of foreign subsidiaries, and creating new taxes on foreign sourced earnings. As of March 31, 2019, we completed the accounting for tax effects of the Tax Act under ASC 740. There were no impacts to the reporting period ended March 31, 2019. The income tax benefit for the quarters ended March 31, 2019 and 2018 was $195,000 and $0 respectively, and are included in accounts payable and accrued liabilities on the condensed consolidated balance sheet. Stock-based Compensation Expense The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on share-based payments. Under the provisions of the guidance, stock-based compensation expense is measured at the grant date based on the fair value of the option using a Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of the Company’s stock awards for non-employees is estimated based on the fair market value on each vesting date, accounted for under the variable-accounting method. The authoritative guidance also requires that the Company measure and recognize stock-based compensation expense upon modification of the term of stock award. The stock-based compensation expense for such modification is accounted for as a repurchase of the original award and the issuance of a new award. Calculating stock-based compensation expense requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility, and the pre-vesting option forfeiture rate. The Company estimates the expected life of options granted based on historical exercise patterns, which are believed to be representative of future behavior. The Company estimates the volatility of the Company’s common stock on the date of grant based on historical volatility. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience of its stock-based awards that are granted, exercised and cancelled. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could be significantly different from what was recorded in the current period. The Company also grants performance based restricted stock awards to employees and consultants. These awards will vest if certain employee\consultant-specific or company-designated performance targets are achieved. If minimum performance thresholds are achieved, each award will convert into a designated number of WORX common stock. If minimum performance thresholds are not achieved, then no shares will be issued. Based upon the expected levels of achievement, stock-based compensation is recognized on a straight-line basis over the requisite service period. The expected levels of achievement are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation is adjusted in the period of change and recorded on the statements of operations and the remaining unrecognized stock-based compensation is recorded over the remaining requisite service period. See “Note 10 – Stockholders Equity” for additional detail. Indemnification The Company provides indemnification of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use of the Company’s software. In accordance with authoritative guidance for accounting for guarantees, the Company evaluates estimated losses for such indemnification. The Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, no such claims have been filed against the Company and no liability has been recorded in the Company’s financial statements. As permitted under Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company believes, given the absence of any such payments in the Company’s history, and the estimated low probability of such payments in the future, that the estimated fair value of these indemnification agreements is immaterial. In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable the Company to recover any payments, should they occur. Contingencies From time to time, the Company may be involved in legal and administrative proceedings and claims of various types. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. Management reviews these estimates in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable but the amount of loss cannot be reasonably estimated, the Company discloses the loss contingency and an estimate of possible loss or range of loss (unless such an estimate cannot be made). The Company does not recognize gain contingencies until they are realized. Legal costs incurred in connection with loss contingencies are expensed as incurred. See “Note 9 – Commitments and Contingencies Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, difficult, and subjective judgment include the accounting for the business combination, the recognition of revenue, collectability of accounts receivable, valuation of convertible notes receivable and related warrants, the assessment of recoverability of goodwill and intangible assets, the assessment of useful lives and the recoverability of property and equipment, the valuation and recognition of stock-based compensation expense, loss contingencies, and income taxes. Actual results could differ materially from those estimates. Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is provided for lessees of capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) Targeted Improvements (“ASU 2018-11”). ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company adopted the provisions of ASU 2016-02 and ASU 2018-11 in the quarter beginning January 1, 2019. The adoption resulted in the recognition of a right of use asset of approximately $56,000 and lease liability of approximately $56,000, and additional disclosures. In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities (“ASU 2018-17”). ASU 2018-17 provides that indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. ASU 2018-17 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We do not expect the standard to have a material impact on our consolidated financial statements. In February 2018, the FASB issued new guidance (ASU 2018-02) to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts & Jobs Act. We have adopted the new standard effective January 1, 2019, and the standard did not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, “ Stock-based Compensation: Improvements to Nonemployee Share-based Payment Accounting, |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combination Disclosure [Text Block] | Note 4. Business Combinations Preliminary purchase accounting On February 1, 2019, the exchanged all of its outstanding shares in exchange for 11,865,306 The acquisition was accounted for under the acquisition method of accounting. The assets acquired, liabilities assumed and preliminary purchase allocation, which is based on estimates and valuations of management, is as follows: Estimated Useful Estimated Cash $ 5,441,437 Goodwill 8,466,282 Identifiable intangible assets: Ticketing software 5 64,000 Promoter relationships 7 176,000 Total identifiable intangible assets 240,000 Accounts payable (1,901,624 ) Current liabilities - discontinued operations (380,789 ) Aggregate purchase price $ 11,865,306 The allocation of consideration to the assets acquired and liabilities assumed at their estimated acquisition date fair values are considered preliminary and may change within the permissible measurement period, not to exceed one year. Identified intangible assets consist of the following: March 31, 2019 Intangible assets Useful Life Gross Accumulated Net Ticketing software 5 years $ 64,000 $ (2,133 ) $ 61,867 Promoter relationships 7 years 176,000 (4,191 ) 171,809 Total intangible assets, gross $ 240,000 $ (6,324 ) $ 233,676 Amortization expense for the quarter ended March 31, 2019 and 2018, was $6,324 and $0, respectively. As of March 31, 2019, the estimated future amortization expense of amortizable intangible assets is as follows: 2019 (remaining 9 months) $ 28,457 2020 37,943 2021 37,943 2022 37,943 2023 37,943 Thereafter 53,447 $ 233,676 Goodwill The changes to the carrying value of goodwill from January 1, 2019 through March 31, 2019 are reflected below: December 31, 2018 $ — Goodwill related to the acquisition of Alliance MMA 8,446,282 March 31, 2019 $ 8,446,282 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 5. Related Party Transactions Due from Shareholder The Company’s founder and majority stockholder had provided cash advances on an unsecured and non-interest-bearing basis, during the first few years of operation. Beginning in 2016, the founder began receiving distributions from the Company. The amounts owed to and due from the shareholder have been netted in the accompanying consolidated balance sheets. In January 2019, this shareholder surrendered 1,401 common shares to the Company as settlement of the balance due. As of March 31, 2019, and December 31, 2018, the net balance due from the founder was $0 and $1.4 million, respectively. The balance did not carry a maturity date and there were no repayment terms. Due to Shareholder In October 2016, the Company entered into an unsecured loan agreement with a minority shareholder for up to $1 million of borrowings for operating expenses. In November 2016 and January 2018, the Company entered into additional loan agreements to provide up to an additional $2 million of borrowings for which the Company has guaranteed payment from its subsidiary. The interest rate for the notes is 10% per annum and notes mature in January 2021. One of the notes bore interest at 10% for the first 90 days and was then adjusted to 18% per annum. As previously mentioned, on August 20, 2018, the Company entered into a Stock Exchange Agreement with Alliance MMA, as amended December 18, 2018 in connection therewith this minority shareholder agreed to accept Series A Preferred Stock Units having a face value equal to the total amount owed to him ($2.1 As of March 31, 2019, and December 31, 2018, the due to shareholder totaled $192,446 and $1,591,491 respectively. The Company incurred interest expense of $23,720 and $41,623 for the quarter ended March 31, 2019 and 2018, respectively. As of March 31, 2019 and 2018, the amount accrued was $0 and $41,623, respectively. In addition, this shareholder also provided office space to the Company at no cost. |
Convertible Notes Receivable
Convertible Notes Receivable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Note 6. Convertible Notes Receivable On June 28, 2018, SCWorx Acquisition Corp. entered into a SPA with Alliance MMA, under which SCW LLC agreed to buy up to $1.0 million in principal amount of convertible notes and warrants to purchase up to 671,142 [35,323] shares of common stock. The notes were originally convertible into shares of common stock at a conversion price of $0.3725 [$7.0775] and bore interest at 10% annually. The warrants were originally exercisable for shares of common stock at an exercise price of $0.3725 [$7.0775]. Under the SPA, SCWorx Acquisition Corp. agreed to fund (i) $500,000 at the initial closing, (ii) a second tranche of $250,000 upon the signing of a business combination agreement with the Company and (iii) a third tranche of $250,000 upon mutual agreement of Alliance MMA and SCWorx. On December 18, 2018, SCWorx agreed to increase the total amount of principal from $1.0 million to $1.25 million and to reduce the conversion price of the final $500,000 installment of the aggregate $1,250,000 note purchase to $0.20 [$3.80] per share. The warrant exercise price for the related warrants to purchase 625,000 [32,895,] shares was reduced to $0.30 [$5.70] per share. Pursuant to the SPA, during 2018, SCWorx purchased convertible notes from Alliance MMA in the principal amount of $1,035,000 and warrants to purchase an aggregate of 859,606 [45,242] shares of common stock, for an aggregate purchase price of $1,035,000. The note for $750,000 bears interest at 10% annually and matures on July 31, 2019. This note was amended in January 2019 to reduce the conversion price to $0.215 [$4.09] per share. The related warrant to acquire 503,356 [26,492] common shares has an exercise price of $0.3725 [$7.0775], a term of five years and was vested upon grant. The note for $275,000 has a conversion price of $0.20 [$3.80], bears interest at 10% annually and matures on June 22, 2019. The warrant to acquire 356,250 [18,750] common shares has an exercise price of $0.30 [$5.70], a term of five years and was vested upon grant. During the first quarter of 2019 SCWorx purchased additional convertible notes from Alliance MMA in the principal amount of $215,000 and warrants to purchase an aggregate of 268,750 [14,145] shares of common stock, for an aggregate purchase price of $215,000. The note for $215,000 has a conversion price of $0.20 [$3.80], bears interest at 10% annually and matures on June 22, 2019. The warrant to acquire 268,750 [14,145] common shares has an exercise price of $0.30 [$5.70], a term of five years and was vested upon grant. The Alliance acquisition closed on February 1, 2019 and the principal, commitment costs and accrued interest related to the purchased Alliance convertible notes automatically converted into 6,883,319 [362,280] shares of Alliance common stock. In January 2019, the SCWorx board of directors declared a dividend of the 6,883,319 [362,280] shares when converted of Alliance common stock to the SCWorx shareholders, two of whom waived their rights to the dividend, resulting in the shares being distributed to shareholders who participated in the 2018 stock offering of $1.25 million. |
Fair value of financial instrum
Fair value of financial instruments | 3 Months Ended |
Mar. 31, 2019 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Financial Instruments Disclosure [Text Block] | Note 7. Fair value of financial instruments FASB ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820-10 also establishes a framework for measuring the fair value of assets and liabilities according to a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the asset or liability based on the best information available under the circumstances. The hierarchy is broken down into the following three levels, based on the reliability of inputs: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. Level 2: Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs for assets or liabilities that are derived from assumptions based on management’s estimate of assumptions that market participants would use in pricing the assets or liabilities. Fair value is determined on a recurring basis based on appraisals by qualified licensed appraisers and is adjusted for management’s estimates of costs to sell and holding period discounts. The following table presents information as of December 31, 2018 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a recurring basis: Financial Instrument Fair Value Valuation technique Significant Unobservable inputs Convertible notes receivable $ 837,817 Monte Carlo Simulation Probability of conversion and interest rates on comparable financial instruments Investment in warrants $ 67,000 Black-Scholes Option Pricing Model Common stock volatility and discount The fair value of the convertible notes receivable (and related discount) at the date of issuance was determined using the Monte Carlo simulation, probability of conversion and comparable interest rates. The Company did not have any of these financial instruments at March 31, 2019. The assumptions used to measure the fair value of the convertible notes receivable as of original issuance date and as of December 31, 2018 were as follows: Issuance December 31, Risk-Free Interest Rate 2.41%-2.47 % 2.41 % Probability of conversion into equity 50%-90 % 90 % Expected Volatility 91.95 % 91.95 % Term .09-.59 years .09 year The Company held a warrant to purchase common shares of Alliance MMA. The fair value of the warrant asset (and related discount) at the date of issuance was determined using the Black-Scholes option pricing model. The Black-Scholes model uses a combination of observable inputs (Level 2) and unobservable inputs (Level 3) in calculating fair value. The assumptions used to measure the fair value of the warrants as of original issuance date and as of December 31, 2018 were as follows: Issuance December 31, Risk-Free Interest Rate 2.47 % 2.41 % Expected Dividend Yield 0 % 0 % Expected Volatility 91.95 % 91.95 % Term 5 years 5 years Fair Market Value of Common Stock $ 0.3275 $ 0.16 The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2018 are presented in the following table: Quoted prices in active Significant markets for other Significant identical observable unobservable assets inputs inputs (level 1) (level 2) (level 3) Financial assets: Convertible notes receivable $ - $ - $ 837,317 Investment in warrants - - 67,000 Total $ - $ - $ 904,317 A summary of the changes in the Company’s convertible notes receivable at fair value using significant observable inputs (Level 3) as of and for the quarter ended March 31, 2019 is as follows: 2019 Convertible notes receivable, December 31, 2018 $ 837,317 Notes issued (face value $215,000), at fair value 196,000 Increase in fair value 531,405 Conversion of notes into common stock (1,564,722 ) Investment in notes receivable, March 31, 2019 $ - A summary of the changes in the Company’s investment in warrants measured at fair value using significant observable inputs (Level 3) as of and for the quarter ended March 31, 2019 is as follows: 2019 Investment in warrants, December 31, 2018 $ 67,000 Warrants issued to the Company 19,000 Increase in fair value 55,000 Conversion of warrants into common stock (141,000 ) Investment in warrants, March 31, 2019 $ - The values of the investment in warrants at issuance and as of March 31, 2019 were $152,000 and $0, respectively, with a gain from the change in fair value of $55,000 for the quarter ended March 31, 2019 and is disclosed in the accompanying consolidated statement of operations. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Lessee, Operating Leases [Text Block] | Note 8. Leases Operating Leases Under Topic 842, a contract is a lease, or contains a lease, if the contract conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration. To determine whether a contract conveys the right to control the use of an identified asset for a period of time, an entity shall assess whether, throughout the period of use, the entity has both of the following: (a) the right to obtain substantially all of the economic benefits from use of the identified asset; and (b) the right to direct the use of the identified asset. The Company leases office facilities under operating leases. Our principle executive office in New York City is under a month to month arrangement. The Company’s office lease has a remaining lease of less than one year. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. As a practical expedient, the Company elected, for all office and facility leases, not to separate nonlease components (e.g., common-area maintenance costs) from lease components (e.g., fixed payments including rent) and instead to account for each separate lease component and its associated non-lease components as a single lease component. The Company uses its incremental borrowing rate for purposes of discounting lease payments. Rent expense for the quarters ended March 31, 2019 and 2018 was approximately $3,877 and $9,650 respectively. On January 1, 2019, the Company adopted Topic 842 using the modified retrospective approach. The Company recorded operating lease assets (right-of-use assets) of approximately $53,000 and operating lease liabilities of approximately $53,000. There was no impact to accumulated deficit upon adoption of Topic 842. We have operating leases for corporate, business and technician offices. Leases with an initial term of 12 months or less, including month-to-month agreements, are not recorded on the consolidated balance sheet, unless the arrangement includes an option to purchase the underlying asset, or an option to renew the arrangement, that we are reasonably certain to exercise (short-term leases). Our leases have remaining lease terms of one to 15 months, none of which include options to extend the leases without a new arrangement. As of March 31, 2019, assets recorded under operating leases were approximately $43,000. Operating lease right of use assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The discount rate used to determine the commencement date present value of lease payment is our incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The following table presents supplemental consolidated balance sheet information related to our operating leases: As of Right-of-use Assets $ 42,655 Short-term operating lease liabilities $ 42,655 For the three months ended March 31, 2019, the components of lease expense were as follows: Three Months Ended Operating lease cost $ 10,016 Interest expense 1,234 Total lease cost $ 11,250 Other information related to leases was as follows: Three Months Ended Supplemental Cash Flows Information Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows for operating leases $ 11,250 Weighted Average Remaining Lease term (months) – Operating Lease 12 Weighted Average Discount Rate – Operating Lease 10 % The maturity analysis of the Company’s annual undiscounted cash flows of operating lease liabilities as of March 31, 2019 are as follows: Operating Lease Year Ending: 2019 (excluding the quarter ended March 31, 2019) $ 33,750 2020 11,250 Total minimum lease payments 45,000 Lease amount representing interest (2,345 ) Total lease liabilities $ 42,655 There were no commitments for non-cancelable operating leases as of December 31, 2018. As of March 31, 2019, we |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Note 9. Commitments and Contingencies Legal Proceedings In the normal course of business or otherwise, we may become involved in legal proceedings. We will accrue a liability for such matters when it is probable that a liability has been incurred and the amount can be reasonably estimated. When only a range of possible loss can be established, the most probable amount in the range is accrued. If no amount within this range is a better estimate than any other amount within the range, the minimum amount in the range is accrued. The accrual for a litigation loss contingency might include, for example, estimates of potential damages, outside legal fees and other directly related costs expected to be incurred. On March 29, 2019, Network 1 Financial Securities Inc. (“Network One”) served a complaint against Alliance MMA. Network One alleges that Alliance breached its obligation under its agreements with Alliance to indemnify Network One for certain costs it incurred in connection with the defense and settlement of the class action litigation previously instituted against Alliance and Network One. This class action litigation has since been resolved, as previously disclosed. Network One has demanded approximately $135,000 in payment of alleged damages. The Company does not believe that it owes the amount demanded and intends to vigorously defend against these claims. On December 19, 2018, the Company’s former CEO, Robert L. Mazzeo, who resigned on May 25, 2018, served a complaint against Alliance MMA in the United States District Court for the Southern District of NY. Mazzeo alleges that he (i) was fraudulently induced to become the CEO of the Company and (ii) entered into an employment contract with the Company and that the Company breached said alleged contract. Mazzeo seeks damages in “excess of $500,000.” The Company believes that the lawsuit is frivolous and violative of Rule 11 of the Federal Rules of Civil Procedure. The Company filed an answer to the complaint on February 5, 2019, and in addition to mounting a vigorous defense, filed counter claims alleging breach of fiduciary duty. The Company does not believe that it owes the amount demanded and intends to vigorously defend against these claims. In August 2018, SCWorx settled a dispute with a former employee for $260,000, approximately $132,000 Other As part of the stock offering completed in January 2018, Alliance issued warrants with a provision requiring Alliance to pay the warrant holder the Black - Scholes value of the warrant upon a fundamental transaction as defined in the SPA. On August 20, 2018, Alliance entered into a Stock Exchange Agreement with SCWorx which upon the closing in February 2019, qualified as a fundamental transaction. The holders of the warrants had thirty days to notify SCWorx of the exercise of their rights under this provision, and two holders did so in the allotted time. The Company has negotiated settlements with the warrant holders aggregating $175,000 which has been accrued at March 31, 2019. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 10. Stockholders’ Equity The December 31, 2018 common share and additional paid-in capital amounts have been restated to reflect the share exchange in connection with the Acquisition and a subsequent one-for-nineteen reverse stock split. Transfer of Common Shares to Consultants On or about February 1, 2019, the Company’s Founder and CEO as well as the President, transferred an aggregate of approximately 1,379,000 and 144,000 common shares, respectively to certain consultants of the Company, of which approximately 983,000 and 144,000 common shares were sold to consultants in exchange for promissory notes. The Company accounted for these share transfers as stock-based compensation expense based upon the black-scholes model as if these were stock option grants made by the Company. The Company used the following inputs in the black-scholes option pricing model, expected life of 5 years, risk-free interest rate of 2.51%, volatility 92% and dividend yield of 0%. As a result, the Company recognized approximately $3.6 million of stock-based compensation expense related to these share transfers. Additionally, approximately 396,000 shares on common stock were transferred by the Founder and CEO to contractors for no consideration. The Company accounted for these share transfers as stock based compensation based upon the underlying common share price of $0.23 as of the date of transfer. The Company recognized $1.7 million of stock-based compensation expense related to these transfers. Stock Option Plan In connection with the acquisition, the Company adopted the Alliance MMA 2016 Stock Option Plan as Amended. The Alliance MMA 2016 Equity Incentive Plan allows the Company to grant shares of the Company’s common stock to the Company’s directors, officers, employees and consultants. On January 30, 2019, the Alliance MMA shareholders approved the amendment of the Alliance MMA 2016 Stock Option Plan to increase the number of shares of common stock available for issuance thereunder to 3,000,000 shares of common stock, on a post-split basis. On February 13, 2019, the Board of Directors of the Company granted an aggregate of 425,000 restricted stock units (“RSUs”) under the Amended Alliance MMA 2016 Stock Option Plan, of which an aggregate 325,000 The number of shares of the Company’s common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of March 31, 2019 are: Reflective of one-for-nineteen reverse stock split Warrant Grants Stock Option Grants Number of Shares Subject to Warrants Weighted-Average Exercise Price Per Share Number of Shares Subject to Options Weighted-Average Exercise Price Per Share Balance at December 31, 2018 236,825 $ 27.84 135,023 $ 7.70 Granted 34,395 - 53,572 5.49 Exercised (61,023 ) 5.51 - - Cancelled/Forfeited - - - - Balance at March 31, 2019 210,197 $ 2.33 188,595 $ 2.22 Exercisable at March 31, 2019 210,197 $ 2.33 188,595 $ 2.22 As of March 31, 2019 and December 31, 2018, the total unrecognized expense for unvested stock options and restricted stock awards, net of actual forfeitures, was approximately $3.8 million and $0 respectively, to be recognized over a three year period for restricted stock awards and one year for option grants. Stock-based compensation expense for the three months ended March 31, 2019 and 2018 is as follows: Three Months Ended March 31, 2019 2018 Stock-based compensation expense $ 5,629,833 $ - Stock-based compensation expense categorized by the equity components for the three months ended March 31, 2019 and 2018 is as follows: Three Months Ended March 31, 2019 2018 Stock option awards $ 49,018 $ - Warrants - - Common stock 257,885 - Transfer of common stock by founders to contractors 5,322,930 - $ 5,629,833 $ - |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Note 11. Net Loss per Share Basic net loss per share is computed by dividing net loss for the period by the weighted average shares of common stock outstanding during each period. Diluted net loss per share is computed by dividing net loss for the period by the weighted average shares of common stock, common stock equivalents and potentially dilutive securities outstanding during each period. The Company uses the treasury stock method to determine whether there is a dilutive effect of outstanding option grants. The following securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive: Three Months 2019 2018 Stock options 188,595 - Warrants 196,052 - Total common stock equivalents 384,647 - |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying consolidated financial statements include the accounts of SCWorx Corp. (f/k/a Alliance MMA) and its wholly-owned subsidiaries, SCW FL Corp and Primrose Solutions, LLC. All significant intercompany balances and transactions are eliminated in consolidation. |
Cash | Cash Cash is maintained with various financial institutions. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Management applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Management defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, management considers the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Inputs that are generally unobservable and typically reflect management's estimate of assumptions that market participants would use in pricing the asset or liability. |
Concentration of Credit and Other Risks | Concentration of Credit and Other Risks Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of accounts receivable, due from shareholder and convertible notes receivable. The Company believes that any concentration of credit risk in its accounts receivable is substantially mitigated by the Company’s evaluation process, relatively short collection terms and the high level of credit worthiness of its customers. The Company performs ongoing internal credit evaluations of its customers’ financial condition, obtains deposits and limits the amount of credit extended when deemed necessary but generally requires no collateral. The Company believes that any concentration of credit risk in its due from shareholder and convertible notes receivable was substantially mitigated by the shareholder’s material interest in the Company, ability to sell off portions of the interest, if necessary, and the closing of the acquisition of the SCWorx by Alliance and conversion of the notes payable to Series A Preferred share and the settlement of the due from stockholder balance with the surrender of 1,401 SCWorx common shares in January 2019. For the quarter ended March 31, 2019, the Company had two customers representing 24% and 11% of aggregate revenues. For the quarter ended March 31, 2018, the Company had three customers representing 23%, 21% and 15% |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company continually monitors customer payments and maintains a reserve for estimated losses resulting from its customers' inability to make required payments. In determining the reserve, the Company evaluates the collectability of its accounts receivable based upon a variety of factors. In cases where the Company becomes aware of circumstances that may impair a specific customer's ability to meet its financial obligations, the Company records a specific allowance against amounts due. For all other customers, the Company recognizes allowances for doubtful accounts based on its historical write-off experience in conjunction with the length of time the receivables are past due, customer creditworthiness, geographic risk and the current business environment. Actual future losses from uncollectible accounts may differ from the Company's estimates. The Company deemed no allowance for doubtful accounts necessary as of March 31, 2019 and December 31, 2018. |
Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in the lease right-of-use (“ROU”) assets, current portion and long-term portion of lease obligations on our consolidated balance sheet. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments to be made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease, which are included in the lease ROU asset when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease components only, none with non-lease components, which are generally accounted for separately. |
Business Combinations | Business Combinations The Company includes the results of operations of the business it acquired in its consolidated results as of the date of acquisition. The Company allocates the fair value of the purchase consideration of its acquisition to the tangible assets, liabilities and intangible assets acquired, based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The primary items that generate goodwill include the value of the synergies between the acquired businesses and the Company. Intangible assets are amortized over their estimated useful lives. The fair value of contingent consideration (earn out) associated with acquisitions is remeasured each reporting period and adjusted accordingly. Acquisition and integration related costs are recognized separately from the business combination and are expensed as incurred. For additional information regarding the Company’s acquisitions, refer to “Note 4 Business Combination.” |
Goodwill and Intangible Assets | Goodwill and Identified Intangible Assets Goodwill Identified intangible assets For further discussion of goodwill and identified intangible assets, see “Note 4 – Business Combination |
Property, Plant and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the related assets’ estimated useful lives. Equipment, furniture and fixtures are being amortized over a period of one to five years. Expenditures that materially increase asset life are capitalized, while ordinary maintenance and repairs are expensed as incurred. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with Topic 606 to depict the transfer of promised goods or services in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements within the scope of Topic 606 the Company performs the following steps: · Step 1: Identify the contract(s) with a customer · Step 2: Identify the performance obligations in the contract · Step 3: Determine the transaction price · Step 4: Allocate the transaction price to the performance obligations in the contract · Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation The Company follows the accounting revenue guidance under Topic 606 to determine whether contracts contain more than one performance obligation. Performance obligations are the unit of accounting for revenue recognition and generally represent the distinct goods or services that are promised to the customer. The Company has identified the following performance obligations in its contracts with customers: 1) Data Normalization: which includes data preparation, product and vendor mapping, product categorization, data enrichment and other data related services, 2) Software-as-a-service (“SaaS”): which is generated from clients’ access of and usage of the Company’s hosted software solutions on a subscription basis for a specified contract term, which is usually annually. In SaaS arrangements, the client cannot take possession of the software during the term of the contract and generally has the right to access and use the software and receive any software upgrades published during the subscription period. 3) Maintenance: which includes ongoing data cleansing and normalization, content enrichment, and optimization, and 4) Professional Services: mainly related to specific customer projects to manage and/or analyze data and review for cost reduction opportunities. A contract will typically include Data Normalization, SaaS and Maintenance, which are distinct performance obligations and are accounted for separately. The transaction price is allocated to each separate performance obligation on a relative stand-alone selling price basis. Significant judgement is required to determine the standalone selling price for each distinct performance obligation and is typically estimated based on observable transactions when these services are sold on a standalone basis. At contract inception, an assessment of the goods and services promised in the contracts with customers is performed and a performance obligation is identified for each distinct promise to transfer to the customer a good or service (or bundle of goods or services). To identify the performance obligations, the Company considers all the goods or services promised in the contract regardless of whether they are explicitly stated or are implied by customary business practices. Revenue is recognized when the performance obligation has been met. The Company considers control to have transferred upon delivery because the Company has a present right to payment at that time, the Company has transferred use of the good or service, and the customer is able to direct the use of, and obtain substantially all the remaining benefits from, the good or service provides. The Company’s SaaS and Maintenance contracts typically have termination for convenience without penalty clauses and accordingly, are generally accounted for as month-to-month agreements. If it is determined that the Company has not satisfied a performance obligation, revenue recognition will be deferred until the performance obligation is deemed to be satisfied. Revenue recognition for the Company’s performance obligations are as follows: Data Normalization and Professional Services The Company’s Data Normalization and Professional Services are typically fixed fee. When these services are not combined with SaaS or Maintenance revenues as a single unit of accounting, these revenues are recognized as the services are rendered and when contractual milestones are achieved and accepted by the customer. Software-as-a-Service and Maintenance Software-as-a-service and maintenance revenues are recognized ratably over the contract terms beginning on the commencement date of each contract, which is the date the Company’s service is made available to customers. The Company does have some contracts that have payment terms that differ from the timing of revenue recognition which requires us to assess whether the transaction price for those contracts include a significant financing component. The Company has elected the practical expedient that permits an entity to not adjust for the effects of a significant financing component if it expects that at the contract inception, the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. The Company does not maintain contracts in which the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service exceeds the one-year threshold. In periods prior to the adoption of ASC 606, the Company recognized revenues when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and the collectability of the resulting receivable is reasonably assured. The adoption of Topic 606 did not result in a cumulative effect adjustment to our opening retained earnings since there was no significant impact upon adoption of Topic 606. There was also no material impact to revenues, or any other financial statement line items for the year ended December 31, 2018 as a result of applying ASC 606. The Company has one revenue stream, from the SaaS business, and has not presented any varying factors that affect the nature, timing and uncertainty of revenues and cash flows. There were no revenues that were recognized from performance obligations that were partially satisfied prior to January 1, 2018. Costs to Obtain and Fulfill a Contract Costs to fulfill a contract typically include costs related to satisfying performance obligations as well as general and administrative costs that are not explicitly chargeable to customer contracts. These expenses are recognized and expensed when incurred in accordance with ASC 340-40. |
Cost of Revenue | Cost of Revenue Cost of revenues primarily represents data center hosting costs, consulting services and maintenance of the Company’s large data array that were incurred in delivering professional services and maintenance of the Company’s large data array during the periods presented. |
Receivables and Contract Balances | Contract Balances Contract assets arise when the revenue associated prior to the Company’s unconditional right to receive a payment under a contract with a customer (i.e. unbilled revenue) and are derecognized when either it becomes a receivable or the cash is received. If any, contract assets are reported on the consolidated balance sheet. There are no contract assets as of March 31, 2019 and December 31, 2018. Contract liabilities arise when customers remit contractual cash payments in advance of the Company satisfying its performance obligations under the contract and are derecognized when the revenue associated with the contract is recognized when the performance obligation is satisfied. Contract liabilities were $ 811,922 816,714 |
Research and Development Costs | Research and Development Costs The Company expenses all research and development related costs as incurred. Research and development cost for the quarters ended March 31, 2019 and 2018 was |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. There were no advertising costs for the quarters ended March 31, 2019 and 2018. |
Income Taxes | Income Taxes The Company converted to a corporation from a limited liability company during 2018. The Company uses the asset and liability method of accounting for income taxes in accordance with Accounting Standard Codification (“ASC”) Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. For the quarter ended March 31, 2019, the Company has evaluated available evidence and concluded that the Company may not realize all the benefit of its deferred tax assets; therefore, a valuation allowance has been established for its deferred tax assets. ASC Topic 740-10-30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740-10-40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has no material uncertain tax positions for any of the reporting periods presented. On December 22, 2017, the Tax Cuts and Jobs Act of 2017, (“the Tax Act”) was enacted. The Tax Act significantly revised the U.S. corporate income tax regime by, including but not limited to, lowering the U.S. corporate income tax rate from 34% to 21% effective January 1, 2018, implementing a territorial tax system, imposing a one-time transition tax on previously untaxed accumulated earnings and profits of foreign subsidiaries, and creating new taxes on foreign sourced earnings. As of March 31, 2019, we completed the accounting for tax effects of the Tax Act under ASC 740. There were no impacts to the reporting period ended March 31, 2019. The income tax benefit for the quarters ended March 31, 2019 and 2018 was $195,000 and $0 respectively, and are included in accounts payable and accrued liabilities on the condensed consolidated balance sheet. |
Share-based Compensation, Option and Incentive Plans | Stock-based Compensation Expense The Company accounts for stock-based compensation expense in accordance with the authoritative guidance on share-based payments. Under the provisions of the guidance, stock-based compensation expense is measured at the grant date based on the fair value of the option using a Black-Scholes option pricing model and is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of the Company’s stock awards for non-employees is estimated based on the fair market value on each vesting date, accounted for under the variable-accounting method. The authoritative guidance also requires that the Company measure and recognize stock-based compensation expense upon modification of the term of stock award. The stock-based compensation expense for such modification is accounted for as a repurchase of the original award and the issuance of a new award. Calculating stock-based compensation expense requires the input of highly subjective assumptions, including the expected term of the stock-based awards, stock price volatility, and the pre-vesting option forfeiture rate. The Company estimates the expected life of options granted based on historical exercise patterns, which are believed to be representative of future behavior. The Company estimates the volatility of the Company’s common stock on the date of grant based on historical volatility. The assumptions used in calculating the fair value of stock-based awards represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and the Company uses different assumptions, its stock-based compensation expense could be materially different in the future. In addition, the Company is required to estimate the expected forfeiture rate and only recognize expense for those shares expected to vest. The Company estimates the forfeiture rate based on historical experience of its stock-based awards that are granted, exercised and cancelled. If the actual forfeiture rate is materially different from the estimate, stock-based compensation expense could be significantly different from what was recorded in the current period. The Company also grants performance based restricted stock awards to employees and consultants. These awards will vest if certain employee\consultant-specific or company-designated performance targets are achieved. If minimum performance thresholds are achieved, each award will convert into a designated number of WORX common stock. If minimum performance thresholds are not achieved, then no shares will be issued. Based upon the expected levels of achievement, stock-based compensation is recognized on a straight-line basis over the requisite service period. The expected levels of achievement are reassessed over the requisite service periods and, to the extent that the expected levels of achievement change, stock-based compensation is adjusted in the period of change and recorded on the statements of operations and the remaining unrecognized stock-based compensation is recorded over the remaining requisite service period. See “Note 10 – Stockholders Equity” for additional detail. |
Indemnification | Indemnification The Company provides indemnification of varying scope to certain customers against claims of intellectual property infringement made by third parties arising from the use of the Company’s software. In accordance with authoritative guidance for accounting for guarantees, the Company evaluates estimated losses for such indemnification. The Company considers such factors as the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. To date, no such claims have been filed against the Company and no liability has been recorded in the Company’s financial statements. As permitted under Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company believes, given the absence of any such payments in the Company’s history, and the estimated low probability of such payments in the future, that the estimated fair value of these indemnification agreements is immaterial. In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable the Company to recover any payments, should they occur. |
Commitments and Contingencies | Contingencies From time to time, the Company may be involved in legal and administrative proceedings and claims of various types. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. Management reviews these estimates in each accounting period as additional information becomes known and adjusts the loss provision when appropriate. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in the consolidated financial statements. If a loss is probable but the amount of loss cannot be reasonably estimated, the Company discloses the loss contingency and an estimate of possible loss or range of loss (unless such an estimate cannot be made). The Company does not recognize gain contingencies until they are realized. Legal costs incurred in connection with loss contingencies are expensed as incurred. See “Note 9 – Commitments and Contingencies |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The accounting estimates and assumptions that require management’s most significant, difficult, and subjective judgment include the accounting for the business combination, the recognition of revenue, collectability of accounts receivable, valuation of convertible notes receivable and related warrants, the assessment of recoverability of goodwill and intangible assets, the assessment of useful lives and the recoverability of property and equipment, the valuation and recognition of stock-based compensation expense, loss contingencies, and income taxes. Actual results could differ materially from those estimates. |
Recently Adopted Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is provided for lessees of capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) Targeted Improvements (“ASU 2018-11”). ASU 2018-11 allows all entities adopting ASU 2016-02 to choose an additional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. ASU 2018-11 also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company adopted the provisions of ASU 2016-02 and ASU 2018-11 in the quarter beginning January 1, 2019. The adoption resulted in the recognition of a right of use asset of approximately $56,000 and lease liability of approximately $56,000, and additional disclosures. In October 2018, the FASB issued ASU No. 2018-17, Consolidation (Topic 810): Targeted Improvements to Related Party Guidance for Variable Interest Entities (“ASU 2018-17”). ASU 2018-17 provides that indirect interests held through related parties in common control arrangements should be considered on a proportional basis for determining whether fees paid to decision makers and service providers are variable interests. ASU 2018-17 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. We do not expect the standard to have a material impact on our consolidated financial statements. In February 2018, the FASB issued new guidance (ASU 2018-02) to allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts & Jobs Act. We have adopted the new standard effective January 1, 2019, and the standard did not have a material impact on our consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test. Under ASU 2017-04, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit. This guidance will be effective for us in the first quarter of 2020 on a prospective basis, and early adoption is permitted. We do not expect the standard to have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, “ Stock-based Compensation: Improvements to Nonemployee Share-based Payment Accounting, |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Schedule Of Business Acquisition Purchase Price Allocation And Useful Life Of Intangible Assets [Table Text Block] | The assets acquired, liabilities assumed and preliminary purchase allocation, which is based on estimates and valuations of management, is as follows: Estimated Useful Estimated Cash $ 5,441,437 Goodwill 8,466,282 Identifiable intangible assets: Ticketing software 5 64,000 Promoter relationships 7 176,000 Total identifiable intangible assets 240,000 Accounts payable (1,901,624 ) Current liabilities - discontinued operations (380,789 ) Aggregate purchase price $ 11,865,306 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block] | Identified intangible assets consist of the following: March 31, 2019 Intangible assets Useful Life Gross Accumulated Net Ticketing software 5 years $ 64,000 $ (2,133 ) $ 61,867 Promoter relationships 7 years 176,000 (4,191 ) 171,809 Total intangible assets, gross $ 240,000 $ (6,324 ) $ 233,676 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | As of March 31, 2019, the estimated future amortization expense of amortizable intangible assets is as follows: 2019 (remaining 9 months) $ 28,457 2020 37,943 2021 37,943 2022 37,943 2023 37,943 Thereafter 53,447 $ 233,676 |
Schedule of Goodwill [Table Text Block] | The changes to the carrying value of goodwill from January 1, 2019 through March 31, 2019 are reflected below: December 31, 2018 $ — Goodwill related to the acquisition of Alliance MMA 8,446,282 March 31, 2019 $ 8,446,282 |
Fair value of financial instr_2
Fair value of financial instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Financial Instruments, Owned, at Fair Value [Abstract] | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block] | The following table presents information as of December 31, 2018 about significant unobservable inputs (Level 3) used in the valuation of assets measured at fair value on a recurring basis: Financial Instrument Fair Value Valuation technique Significant Unobservable inputs Convertible notes receivable $ 837,817 Monte Carlo Simulation Probability of conversion and interest rates on comparable financial instruments Investment in warrants $ 67,000 Black-Scholes Option Pricing Model Common stock volatility and discount |
Fair Value Option, Disclosures [Table Text Block] | The assumptions used to measure the fair value of the convertible notes receivable as of original issuance date and as of December 31, 2018 were as follows: Issuance December 31, Risk-Free Interest Rate 2.41%-2.47 % 2.41 % Probability of conversion into equity 50%-90 % 90 % Expected Volatility 91.95 % 91.95 % Term .09-.59 years .09 year The assumptions used to measure the fair value of the warrants as of original issuance date and as of December 31, 2018 were as follows: Issuance Date December 31, Risk-Free Interest Rate 2.47 % 2.41 % Expected Dividend Yield 0 % 0 % Expected Volatility 91.95 % 91.95 % Term 5 years 5 years Fair Market Value of Common Stock $ 0.3275 $ 0.16 |
Fair Value Measurements, Nonrecurring [Table Text Block] | The balances and levels of the assets measured at fair value on a recurring basis at December 31, 2018 are presented in the following table: Quoted prices in active Significant markets for other Significant identical observable unobservable assets inputs inputs (level 1) (level 2) (level 3) Financial assets: Convertible notes receivable $ - $ - $ 837,317 Investment in warrants - - 67,000 Total $ - $ - $ 904,317 |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | A summary of the changes in the Company’s convertible notes receivable at fair value using significant observable inputs (Level 3) as of and for the quarter ended March 31, 2019 is as follows: 2019 Convertible notes receivable, December 31, 2018 $ 837,317 Notes issued (face value $215,000), at fair value 196,000 Increase in fair value 531,405 Conversion of notes into common stock (1,564,722 ) Investment in notes receivable, March 31, 2019 $ - |
Schedule Of Changes In Investment In Warrants measure At Fair Value [Table Text Block] | A summary of the changes in the Company’s investment in warrants measured at fair value using significant observable inputs (Level 3) as of and for the quarter ended March 31, 2019 is as follows: 2019 Investment in warrants, December 31, 2018 $ 67,000 Warrants issued to the Company 19,000 Increase in fair value 55,000 Conversion of warrants into common stock (141,000 ) Investment in warrants, March 31, 2019 $ - |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Supplemental Consolidated Balance Sheet Information Related To Our Operating Leases [Table Text Block] | The following table presents supplemental consolidated balance sheet information related to our operating leases: As of Right-of-use Assets $ 42,655 Short-term operating lease liabilities $ 42,655 |
Lease, Cost [Table Text Block] | For the three months ended March 31, 2019, the components of lease expense were as follows: Three Months Ended Operating lease cost $ 10,016 Interest expense 1,234 Total lease cost $ 11,250 |
Other Information Related To Leases [Table Text Block] | Other information related to leases was as follows: Three Months Ended Supplemental Cash Flows Information Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows for operating leases $ 11,250 Weighted Average Remaining Lease term (months) – Operating Lease 12 Weighted Average Discount Rate – Operating Lease 10 % |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | The maturity analysis of the Company’s annual undiscounted cash flows of operating lease liabilities as of March 31, 2019 are as follows: Operating Lease Year Ending: 2019 (excluding the quarter ended March 31, 2019) $ 33,750 2020 11,250 Total minimum lease payments 45,000 Lease amount representing interest (2,345 ) Total lease liabilities $ 42,655 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | The number of shares of the Company’s common stock that are issuable pursuant to warrant and stock option grants with time-based vesting as of March 31, 2019 are: Reflective of one-for-nineteen reverse stock split Warrant Grants Stock Option Grants Number of Shares Subject to Warrants Weighted-Average Exercise Price Per Share Number of Shares Subject to Options Weighted-Average Exercise Price Per Share Balance at December 31, 2018 236,825 $ 27.84 135,023 $ 7.70 Granted 34,395 - 53,572 5.49 Exercised (61,023 ) 5.51 - - Cancelled/Forfeited - - - - Balance at March 31, 2019 210,197 $ 2.33 188,595 $ 2.22 Exercisable at March 31, 2019 210,197 $ 2.33 188,595 $ 2.22 |
Employee Stock Option [Member] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | Stock-based compensation expense categorized by the equity components for the three months ended March 31, 2019 and 2018 is as follows: Three Months Ended March 31, 2019 2018 Stock option awards $ 49,018 $ - Warrants - - Common stock 257,885 - Transfer of common stock by founders to contractors 5,322,930 - $ 5,629,833 $ - |
General and Administrative Expense [Member] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | Stock-based compensation expense for the three months ended March 31, 2019 and 2018 is as follows: Three Months Ended March 31, 2019 2018 Stock-based compensation expense $ 5,629,833 $ - |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | The following securities were excluded from the computation of diluted net loss per share for the periods presented because including them would have been anti-dilutive: Three Months 2019 2018 Stock options 188,595 - Warrants 196,052 - Total common stock equivalents 384,647 - |
Description of Business (Detail
Description of Business (Details Textual) - USD ($) | Jan. 02, 2019 | Jan. 31, 2019 | Dec. 18, 2018 | Nov. 30, 2018 | Nov. 16, 2018 | Jul. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Oct. 16, 2018 | Dec. 31, 2018 | Mar. 29, 2019 | Feb. 01, 2019 | Jan. 01, 2019 | Jun. 30, 2018 | Jun. 28, 2018 |
Stock Issued During Period, Value, New Issues | $ 5,884,361 | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 625,000 | 135,000 | 671,142 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.215 | $ 0.30 | $ 0.3725 | |||||||||||||
Convertible Notes Payable, Current | $ 1,000,000 | |||||||||||||||
Proceeds from Issuance of Warrants | $ 215,000 | |||||||||||||||
Notes Payable Related Party Interest Rate | 10.00% | |||||||||||||||
Business Acquisition, Transaction Costs | $ 1,035,000 | $ 1,035,000 | ||||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 75,000 | $ 0 | ||||||||||||||
Common Stock, Shares, Issued | 6,563,195 | 5,838,149 | 5,838,149 | |||||||||||||
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price | $ 5.70 | |||||||||||||||
Debt Instrument, Face Amount | $ 1,250,000 | $ 1,250,000 | ||||||||||||||
Common Stock, Shares, Outstanding | 6,563,195 | 5,838,149 | 5,838,149 | 5,263,158 | ||||||||||||
Convertible Notes Payable Aggregate Value | $ 1,250,000 | 1,250,000 | ||||||||||||||
Notes Payable, Current | $ 215,000 | |||||||||||||||
Note Agreement [Member] | ||||||||||||||||
Payments to Fund Long-term Loans to Related Parties | $ 215,000 | |||||||||||||||
Notes Receivable, Related Parties | 1,250,000 | |||||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.30 | |||||||||||||||
Proceeds from Issuance of Preferred Stock and Preference Stock | $ 500,000 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.20 | |||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 503,356 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.3725 | |||||||||||||||
Conversion Of Common Stock Value | $ 750,000 | |||||||||||||||
SCWorx [Member] | ||||||||||||||||
Stock Issued During Period, Value, New Issues | $ 1,250,000 | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 356,250 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.3725 | |||||||||||||||
Convertible Notes Payable, Current | $ 275,000 | $ 275,000 | ||||||||||||||
Proceeds from Issuance of Warrants | $ 275,000 | |||||||||||||||
Notes Payable Related Party Interest Rate | 10.00% | |||||||||||||||
Stock Issued During Period, Shares, New Issues | 3,125 | |||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period | 6,510 | |||||||||||||||
Warrant [Member] | ||||||||||||||||
Proceeds from Issuance of Warrants | $ 152,000 | |||||||||||||||
Post Split Common Stock [Member] | Series A Preferred Stock [Member] | ||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 5.70 | |||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 3.80 | |||||||||||||||
Post Split Common Stock [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 26,492 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 7.0775 | |||||||||||||||
Post Split Common Stock [Member] | SCWorx [Member] | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 18,750 | 26,492 | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 7.0775 | $ 7.0775 | $ 7.0775 | |||||||||||||
SCWorx Corp [Member] | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 859,606 | 268,750 | 503,356 | |||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.3725 | $ 0.20 | $ 0.20 | $ 0.20 | ||||||||||||
Convertible Notes Payable, Current | $ 1,035,000 | $ 750,000 | $ 1,035,000 | |||||||||||||
Proceeds from Issuance of Warrants | $ 750,000 | $ 750,000 | $ 750,000 | $ 275,000 | ||||||||||||
Notes Payable Related Party Interest Rate | 10.00% | 10.00% | 10.00% | |||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 0.215 | |||||||||||||||
Notes Payable, Current | $ 215,000 | |||||||||||||||
SCWorx Corp [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,128,356 | |||||||||||||||
SCWorx Corp [Member] | Warrant [Member] | Securities Purchase Agreement [Member] | ||||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 59,387 | |||||||||||||||
SCWorx Corp [Member] | Post Split Common Stock [Member] | ||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 4.085 | |||||||||||||||
Alliance [Member] | ||||||||||||||||
Common Stock, Shares, Issued | 100,000,000 | |||||||||||||||
Class of Warrant or Right, Outstanding | 625,000 | |||||||||||||||
Common Stock, Shares, Outstanding | 100,000,000 | |||||||||||||||
Alliance [Member] | Post Split Common Stock [Member] | ||||||||||||||||
Class of Warrant or Right, Outstanding | 32,895 |
Liquidity (Details Textual)
Liquidity (Details Textual) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Cash | $ 2,765,000 | ||
Working Capital | 1,780,000 | ||
Retained Earnings (Accumulated Deficit) | $ (7,196,682) | (8,727,000) | $ (1,481,973) |
Proceeds from Issuance of Private Placement | 1,250,000 | ||
Cash Acquired from Acquisition | $ 5,441,437 | $ 0 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 31, 2019 | |
Cash, FDIC Insured Amount | $ 250,000 | |||
Finance Lease, Right-of-Use Asset | 56,000 | |||
Finance Lease, Liability | 56,000 | |||
Research and Development Expense | 182,339 | $ 0 | ||
Income Tax Expense (Benefit) | (195,000) | $ 0 | ||
Due Settlement For sharesholders | $ 1,401 | |||
Contract with Customer, Liability, Current | $ 811,922 | $ 816,714 | ||
Customer One [Member] | ||||
Concentration Risk, Percentage | 24.00% | 23.00% | ||
Customer One [Member] | Accounts Receivables [Member] | ||||
Concentration Risk, Percentage | 32.00% | 39.00% | ||
Customer Two [Member] | ||||
Concentration Risk, Percentage | 11.00% | 21.00% | ||
Customer Two [Member] | Accounts Receivables [Member] | ||||
Concentration Risk, Percentage | 18.00% | 21.00% | ||
Customer Three [Member] | ||||
Concentration Risk, Percentage | 15.00% | |||
Customer Three [Member] | Accounts Receivables [Member] | ||||
Concentration Risk, Percentage | 12.00% | 13.00% | ||
Maximum [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 7 years | |||
Equipment, furniture and other | 5 months | |||
Minimum [Member] | ||||
Finite-Lived Intangible Asset, Useful Life | 3 years | |||
Equipment, furniture and other | 1 year |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | Feb. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Cash | $ 5,441,437 | ||
Goodwill | 8,466,282 | $ 0 | |
Identifiable intangible assets: | |||
Total identifiable intangible assets | 240,000 | ||
Accounts payable | (1,901,624) | ||
Current liabilities - discontinued operations | (380,789) | ||
Aggregate purchase price | $ 11,865,306 | $ 11,865,306 | |
Ticketing Software [Member] | |||
Intangible assets, Useful Life | 5 years | ||
Identifiable intangible assets: | |||
Total identifiable intangible assets | $ 64,000 | ||
Promoter Relationships [Member] | |||
Intangible assets, Useful Life | 7 years | ||
Identifiable intangible assets: | |||
Total identifiable intangible assets | $ 176,000 |
Business Combinations (Details
Business Combinations (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Gross Assets | $ 240,000 | |
Accumulated Amortization | (6,324) | |
Net | $ 233,676 | $ 0 |
Ticketing software [Member] | ||
Intangible assets, Useful Life | 5 years | |
Gross Assets | $ 64,000 | |
Accumulated Amortization | (2,133) | |
Net | $ 61,867 | |
Promoter relationships [Member] | ||
Intangible assets, Useful Life | 7 years | |
Gross Assets | $ 176,000 | |
Accumulated Amortization | (4,191) | |
Net | $ 171,809 |
Business Combinations (Detail_2
Business Combinations (Details 2) | Mar. 31, 2019USD ($) |
Business Combinations [Abstract] | |
2019 (remaining 9 months) | $ 28,457 |
2020 | 37,943 |
2021 | 37,943 |
2022 | 37,943 |
2023 | 37,943 |
Thereafter | 53,447 |
Total | $ 233,676 |
Business Combinations (Detail_3
Business Combinations (Details 3) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Business Combinations [Abstract] | |
Balance - December 31, 2018 | $ 0 |
Goodwill related to the acquisition of Alliance MMA | 8,446,282 |
Balance - March 31, 2019 | $ 8,466,282 |
Business Combinations (Detail_4
Business Combinations (Details Textual) - USD ($) | Feb. 01, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Business Combination, Consideration Transferred | $ 11,865,306 | $ 11,865,306 | |
Amortization of Intangible Assets | $ 6,324 | $ 0 | |
Alliance MMA [Member] | |||
Number of Common Stock Shares Exchanged for Consideration | 5,263,158 |
Related Party Transactions (Det
Related Party Transactions (Details Textual) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Oct. 31, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Jan. 31, 2019 | Dec. 31, 2018 | Aug. 20, 2018 | |
Due Settlement For sharesholders | $ 1,401 | |||||
Due from Affiliates | $ 0 | $ 1,400,000 | ||||
Unsecured Debt | $ 1,000,000 | |||||
Secured Debt | $ 2,000,000 | |||||
Debt Instrument, Maturity Date | Jan. 31, 2021 | Jun. 22, 2019 | ||||
Debt Instrument, Interest Rate Terms | One of the notes bore interest at 10% for the first 90 days and was then adjusted to 18% per annum. | |||||
Due to Affiliate | $ 192,446 | $ 1,591,491 | ||||
Interest Expense, Related Party | 23,720 | $ 41,623 | ||||
Interest Payable | $ 0 | $ 41,623 | ||||
Alliance [Member] | ||||||
Aggregate Indebtedness | $ 2,100,000 |
Convertible Notes Receivable (D
Convertible Notes Receivable (Details Textual) - USD ($) | Feb. 01, 2019 | Jan. 02, 2019 | Jan. 31, 2019 | Dec. 18, 2018 | Jul. 31, 2018 | Jun. 28, 2018 | Oct. 31, 2016 | Mar. 31, 2019 | Oct. 16, 2018 | Sep. 30, 2018 | Dec. 31, 2018 | Mar. 29, 2019 | Jan. 01, 2019 | Jun. 30, 2018 | Mar. 31, 2018 |
Line of Credit Facility [Line Items] | |||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 10.00% | ||||||||||||||
Debt Instrument, Maturity Date | Jan. 31, 2021 | Jun. 22, 2019 | |||||||||||||
Notes Payable, Current | $ 215,000 | ||||||||||||||
Convertible Notes Payable, Current | $ 1,000,000 | ||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 625,000 | 671,142 | 135,000 | ||||||||||||
Warrants and Rights Outstanding | $ 0.3725 | 215,000 | |||||||||||||
Proceeds from Issuance of Warrants | $ 215,000 | ||||||||||||||
Notes Payable Related Party Interest Rate | 10.00% | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.215 | $ 0.3725 | $ 0.30 | ||||||||||||
Debt Instrument, Face Amount | $ 1,250,000 | $ 1,250,000 | |||||||||||||
Convertible Notes Payable Installment Value | 500,000 | ||||||||||||||
Convertible Notes Payable Aggregate Value | $ 1,250,000 | $ 1,250,000 | |||||||||||||
Warrant, Exercise Price, Decrease | $ 0.30 | ||||||||||||||
Derivative Liability | |||||||||||||||
Fair Value, Option, Changes in Fair Value, Gain (Loss) | |||||||||||||||
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | 6,883,319 | ||||||||||||||
Dividends Payable, Nature | the SCWorx board of directors declared a dividend of the 6,883,319 [362,280] shares when converted of Alliance common stock to the SCWorx shareholders, two of whom waived their rights to the dividend, resulting in the shares being distributed to shareholders who participated in the 2018 stock offering of $1.25 million. | ||||||||||||||
Maximum [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Debt Instrument, Face Amount | $ 1,250,000 | ||||||||||||||
Debt Instrument, Convertible, Conversion Price, Decrease | $ 3.80 | ||||||||||||||
Minimum [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Debt Instrument, Face Amount | $ 1,000,000 | ||||||||||||||
Debt Instrument, Convertible, Conversion Price, Decrease | $ 0.20 | ||||||||||||||
Warrant One [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 503,356 | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.3725 | ||||||||||||||
Warrant Two [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 356,250 | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.30 | ||||||||||||||
Commercial Paper [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Class of Warrant, Term of Warrants | 5 years | ||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 503,356 | ||||||||||||||
Debt Instrument, Description | (i) $500,000 at the initial closing, (ii) a second tranche of $250,000 upon the signing of a business combination agreement with the Company and (iii) a third tranche of $250,000 upon mutual agreement of Alliance MMA and SCWorx. | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.3725 | ||||||||||||||
SCWorx Corp [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Debt Instrument, Maturity Date | Jul. 31, 2019 | ||||||||||||||
Notes Payable, Current | $ 215,000 | ||||||||||||||
Convertible Notes Payable, Current | $ 750,000 | $ 1,035,000 | |||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 859,606 | 268,750 | 503,356 | ||||||||||||
Warrants and Rights Outstanding | 1,035,000 | ||||||||||||||
Proceeds from Issuance of Warrants | $ 750,000 | $ 750,000 | $ 750,000 | $ 275,000 | |||||||||||
Notes Payable Related Party Interest Rate | 10.00% | 10.00% | 10.00% | ||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.3725 | $ 0.20 | $ 0.20 | ||||||||||||
SCWorx Corp [Member] | Securities Purchase Agreement [Member] | |||||||||||||||
Line of Credit Facility [Line Items] | |||||||||||||||
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 1,128,356 |
Fair value of financial instr_3
Fair value of financial instruments (Details) - Fair Value, Measurements, Recurring [Member] | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Valuation Technique, Option Pricing Model [Member] | Convertible Notes Receivable [Member] | |
Warrants And Rights Outstanding Measurement Inputs | Monte Carlo Simulation |
Fair Value, Inputs, Level 3 [Member] | Convertible Notes Receivable [Member] | |
Assets, Fair Value | $ 837,817 |
Investment in Warrants [Member] | Valuation Technique, Option Pricing Model [Member] | |
Warrants And Rights Outstanding Measurement Inputs | Black-Scholes Option Pricing Model |
Investment in Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | |
Assets, Fair Value | $ 67,000 |
Measurement Input, Price Volatility [Member] | Convertible Notes Receivable [Member] | |
Warrants And Rights Outstanding Measurement Inputs | Probability of conversion and interest rates on comparable financial instruments |
Measurement Input, Price Volatility [Member] | Investment in Warrants [Member] | |
Warrants And Rights Outstanding Measurement Inputs | Common stock volatility and discount |
Fair value of financial instr_4
Fair value of financial instruments (Details 1) | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Term | 5 years |
Fair Market Value of Common Stock | $ / shares | $ 0.16 |
Issuance Date [Member] | |
Term | 5 years |
Fair Market Value of Common Stock | $ / shares | $ 0.3275 |
Risk-Free Interest Rate [Member] | |
Derivative Asset, Measurement Input | 2.41 |
Risk-Free Interest Rate [Member] | Issuance Date [Member] | |
Derivative Asset, Measurement Input | 2.47 |
Risk-Free Interest Rate [Member] | Issuance Date [Member] | Maximum [Member] | |
Derivative Asset, Measurement Input | 2.47 |
Risk-Free Interest Rate [Member] | Issuance Date [Member] | Minimum [Member] | |
Derivative Asset, Measurement Input | 2.41 |
Expected Dividend Yield [Member] | |
Derivative Asset, Measurement Input | 0 |
Expected Dividend Yield [Member] | Issuance Date [Member] | |
Derivative Asset, Measurement Input | 0 |
Probability of Conversion into Equity [Member] | |
Derivative Asset, Measurement Input | 90 |
Probability of Conversion into Equity [Member] | Issuance Date [Member] | Maximum [Member] | |
Derivative Asset, Measurement Input | 90 |
Probability of Conversion into Equity [Member] | Issuance Date [Member] | Minimum [Member] | |
Derivative Asset, Measurement Input | 50 |
Expected Volatility [Member] | |
Derivative Asset, Measurement Input | 91.95 |
Expected Volatility [Member] | Issuance Date [Member] | |
Derivative Asset, Measurement Input | 91.95 |
Measurement Input, Expected Term [Member] | |
Term | 1 month 2 days |
Measurement Input, Expected Term [Member] | Issuance Date [Member] | Maximum [Member] | |
Term | 7 months 2 days |
Measurement Input, Expected Term [Member] | Issuance Date [Member] | Minimum [Member] | |
Term | 1 month 2 days |
Fair value of financial instr_5
Fair value of financial instruments (Details 2) - Fair Value, Measurements, Nonrecurring [Member] | Dec. 31, 2018USD ($) |
Fair Value, Inputs, Level 1 [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | $ 0 |
Fair Value, Inputs, Level 1 [Member] | Convertible Notes Receivable [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | 0 |
Fair Value, Inputs, Level 2 [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | 0 |
Fair Value, Inputs, Level 2 [Member] | Convertible Notes Receivable [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | 0 |
Fair Value, Inputs, Level 3 [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | 904,317 |
Fair Value, Inputs, Level 3 [Member] | Convertible Notes Receivable [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | 837,317 |
Investment in Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | 0 |
Investment in Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | 0 |
Investment in Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | |
Investments, Fair Value Disclosure [Abstract] | |
Assets, Fair Value | $ 67,000 |
Fair value of financial instr_6
Fair value of financial instruments (Details 3) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Debt Disclosure [Abstract] | |
Convertible notes receivable, December 31, 2018 | $ 837,317 |
Notes issued (face value $215,000), at fair value | 196,000 |
Increase in fair value | 531,405 |
Conversion of notes into common stock | (1,564,722) |
Investment in notes receivable, March 31, 2019 | $ 0 |
Fair value of financial instr_7
Fair value of financial instruments (Details 4) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Investment in warrants, December 31, 2018 | $ 67,000 | |
Warrants issued to the Company | 19,000 | |
Increase in fair value | 55,000 | $ 0 |
Conversion of warrants into common stock | (141,000) | |
Investment in warrants, March 31, 2019 | $ 0 |
Fair value of financial instr_8
Fair value of financial instruments (Details Textual) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Jun. 28, 2018 | |
Warrants and Rights Outstanding | $ 215,000 | $ 0.3725 |
Unrealized Gain Loss on Investments in warrants | 55,000 | |
Proceeds from Issuance of Warrants | 215,000 | |
Warrant [Member] | ||
Proceeds from Issuance of Warrants | $ 152,000 |
Leases (Details)
Leases (Details) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
Right-of-use Assets | $ 42,655 | $ 53,000 |
Short-term operating lease liabilities | $ 42,655 |
Leases (Details 1)
Leases (Details 1) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 10,016 |
Interest expense | 1,234 |
Total lease cost | $ 11,250 |
Leases (Details 2)
Leases (Details 2) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of operating lease liabilities: | |
Operating cash flows for operating leases | $ 11,250 |
Weighted Average Remaining Lease term (months) – Operating Lease | 12 months |
Weighted Average Discount Rate – Operating Lease | 10.00% |
Leases (Details 3)
Leases (Details 3) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 |
Leases [Abstract] | ||
2019 (excluding the quarter ended March 31, 2019) | $ 33,750 | |
2020 | 11,250 | |
Total minimum lease payments | 45,000 | |
Lease amount representing interest | (2,345) | |
Total lease liabilities | $ 42,655 | $ 53,000 |
Leases (Details Textual)
Leases (Details Textual) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Feb. 01, 2019 | Jan. 01, 2019 | Aug. 20, 2018 | |
Share Price | $ 0.23 | $ 0 | |||
Operating Leases, Rent Expense | $ 3,877 | $ 9,650 | |||
Operating Lease, Right-of-Use Asset | 42,655 | $ 53,000 | |||
Operating Lease, Liability | $ 42,655 | $ 53,000 | |||
Operating Lease Remaining Lease Term | 1 month | ||||
Operating Leases Balance Sheet Assets By Major Class Net | $ 43,000 | ||||
Maximum [Member] | |||||
Operating Lease Remaining Lease Term | 15 months |
Commitments and Contingencies (
Commitments and Contingencies (Details textual) - USD ($) | 1 Months Ended | ||||||
Aug. 31, 2018 | Mar. 31, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Dec. 19, 2018 | Dec. 18, 2018 | Jun. 28, 2018 | |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | 135,000 | 625,000 | 671,142 | ||||
Litigation Settlement, Expense | $ 260,000 | ||||||
Payments Of Litigation Expense | $ 132,000 | ||||||
Mazzeo [Member] | |||||||
Deferred Compensation Arrangement Unrecognized Liability | $ 500,000 | ||||||
Pending Litigation [Member] | |||||||
Loss Contingency Accrual | $ 128,000 | ||||||
Other Warrants [Member] | |||||||
Accrued Warrant Settlement Liability | $ 175,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - $ / shares | 1 Months Ended | 3 Months Ended |
Nov. 16, 2018 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted-Average Exercise Price Per Share, Granted | $ 5.70 | |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares Subject to Options, Balance beginning | 135,023 | |
Number of Shares Subject to Options, Granted | 53,572 | |
Number of Shares Subject to Options, Balance ending | 188,595 | |
Number of Shares Subject to Options, Exercisable | 188,595 | |
Weighted-Average Exercise Price Per Share, Balance beginning | $ 7.70 | |
Weighted-Average Exercise Price Per Share, Granted | 5.49 | |
Weighted-Average Exercise Price Per Share, Exercised | 0 | |
Weighted-Average Exercise Price Per Share, Cancelled/Forfeited | 0 | |
Weighted-Average Exercise Price Per Share, Balance ending | 2.22 | |
Weighted-Average Exercise Price Per Share, Exercisable | $ 2.22 | |
Warrant [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of Shares Subject to Options, Balance beginning | 236,825 | |
Number of Shares Subject to Options, Granted | 34,395 | |
Number of Shares Subject to Options, Exercised | (61,023) | |
Number of Shares Subject to Options, Cancelled/Forfeited | 0 | |
Number of Shares Subject to Options, Balance ending | 210,197 | |
Number of Shares Subject to Options, Exercisable | 210,197 | |
Weighted-Average Exercise Price Per Share, Balance beginning | $ 27.84 | |
Weighted-Average Exercise Price Per Share, Granted | 0 | |
Weighted-Average Exercise Price Per Share, Exercised | 5.51 | |
Weighted-Average Exercise Price Per Share, Cancelled/Forfeited | 0 | |
Weighted-Average Exercise Price Per Share, Balance ending | 2.33 | |
Weighted-Average Exercise Price Per Share, Exercisable | $ 2.33 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - USD ($) | Feb. 01, 2019 | Mar. 31, 2019 | Mar. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 3,600,000 | $ 5,629,833 | $ 0 |
Contractors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 1,700,000 | 5,322,930 | 0 |
Stock Option Awards [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 49,018 | 0 | |
Warrants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 0 | 0 | |
Common Stock [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 257,885 | $ 0 |
Stockholders' Equity (Details T
Stockholders' Equity (Details Textual) - USD ($) | Feb. 13, 2019 | Feb. 01, 2019 | Jan. 30, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Aug. 20, 2018 |
Share Price | $ 0.23 | $ 0 | ||||
Allocated Share-based Compensation Expense | $ 3,600,000 | $ 5,629,833 | $ 0 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 10 years | 5 years | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 0.25% | 2.51% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 90.00% | 92.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Dividend Rate | 0.00% | 0.00% | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 425,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
Contractors [Member] | ||||||
Allocated Share-based Compensation Expense | $ 1,700,000 | $ 5,322,930 | $ 0 | |||
Share-based Compensation Award, Tranche One [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 525,000 | |||||
Founder Shares Exchanged For Promissory Notes [Member] | ||||||
Stock Issued During Period, Shares, Issued for Services | 983,000 | |||||
CEO And President Exchanged For Promissory Notes [Member] | ||||||
Stock Issued During Period, Shares, Issued for Services | 144,000 | |||||
Chief Executive Officer [Member] | ||||||
Stock Issued During Period, Shares, Issued for Services | 1,379,000 | |||||
Number Of Shares Issued To Contractors Without Consideration | 396,000 | |||||
Management [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 325,000 | |||||
Management [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 225,000 | |||||
Consultants [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 100,000 | |||||
Consultants [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 300,000 | |||||
President [Member] | ||||||
Stock Issued During Period, Shares, Issued for Services | 144,000 | |||||
Equity Incentive Plan 2016 [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 5 years | |||||
Share based Compensation Arrangement By Share based Payment Award Options Outstanding Grant Date Fair Value | $ 2,700,000 | |||||
Share based Compensation Arrangement By Share based Payment Award Options Outstanding Awarded Stock Options Under The Plan | 53,572 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 6.49 | |||||
Share based Compensation Arrangement by Sharebased Payment Award Fair Value | $ 431,000 | |||||
Equity Incentive Plan 2016 [Member] | Employee [Member] | ||||||
Share based Compensation Arrangement By Share based Payment Award Options Outstanding Awarded Stock Options Under The Plan | 25,000 | |||||
2016 Stock Option Plan [Member] | ||||||
Stock Issued During Period, Shares, New Issues | 3,000,000 |
Net Loss per Share (Details)
Net Loss per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 384,647 | 0 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 196,052 | 0 |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 188,595 | 0 |