Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Sep. 22, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Frankly Inc. | |
Entity Central Index Key | 1,688,667 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 2,139,392 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 3,443,359 | $ 6,053,203 |
Restricted cash | 634,115 | 634,115 |
Accounts receivable, net | 3,204,676 | 3,242,866 |
Prepaid expenses and other current assets | 1,397,508 | 650,898 |
Total Current Assets | 8,679,658 | 10,581,082 |
Property & equipment, net | 1,243,252 | 1,481,328 |
Software development costs, net | 6,828,332 | 6,710,494 |
Intangible assets, net | 7,198,884 | 7,635,552 |
Goodwill | 6,546,581 | 6,546,581 |
Other assets | 221,800 | 308,604 |
Total Assets | 30,718,507 | 33,263,641 |
Current Liabilities | ||
Accounts payable | 4,286,960 | 4,687,581 |
Accrued expenses | 1,184,477 | 1,367,040 |
Revolving credit facility | 1,319,249 | 1,375,474 |
Capital leases, current portion | 120,042 | 167,635 |
Deferred revenue | 100,978 | 21,702 |
Due to related parties | 3,790,726 | 2,561,572 |
Total Current Liabilities | 10,802,432 | 10,181,004 |
Non-revolving credit facility, net | 11,863,718 | 11,630,384 |
Capital leases, non-current portion | 40,449 | |
Deferred rent | 39,355 | 42,827 |
Other liabilities | 100,450 | 64,766 |
Total Liabilities | 22,805,955 | 21,959,430 |
Commitments and Contingencies (Note 9 and 10) | ||
Shareholder's Equity | ||
Common shares, no par value, unlimited shares authorized, 2,030,800 and 2,139,392 shares outstanding as of December 31, 2016 and June 30, 2017, respectively | ||
Class A restricted voting shares, no par value, unlimited shares authorized, 97,674 and 0 shares outstanding as of December 31, 2016 and June 30, 2017, respectively | ||
Additional paid-in capital | 65,498,540 | 64,986,368 |
Accumulated deficit | (57,550,619) | (53,642,691) |
Accumulated other comprehensive loss | (35,369) | (39,466) |
Total Shareholder's Equity | 7,912,552 | 11,304,211 |
Total Liabilities and Shareholder's Equity | $ 30,718,507 | $ 33,263,641 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Statement of Financial Position [Abstract] | ||
Common stock, no par value | ||
Common stock, shares authorized | Unlimited | Unlimited |
Common stock, shares outstanding | 2,139,392 | 2,030,800 |
Class A restricted voting shares, no par value | ||
Class A restricted voting shares, shares authorized | Unlimited | Unlimited |
Class A restricted voting shares, share outstanding | 0 | 97,674 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Statement [Abstract] | ||||
Total Revenue | $ 6,493,627 | $ 5,247,618 | $ 12,852,781 | $ 10,467,888 |
Costs and operating expenses: | ||||
Cost of revenue (excluding depreciation and amortization) | 3,074,274 | 1,627,060 | 5,834,688 | 3,084,499 |
General and administrative (excluding depreciation and amortization) | 2,237,874 | 2,290,781 | 4,130,857 | 4,382,769 |
Selling and marketing | 743,107 | 824,199 | 1,406,791 | 1,628,866 |
Research and development (excluding depreciation and amortization) | 1,100,528 | 924,794 | 1,948,943 | 2,056,798 |
Depreciation and amortization | 1,092,626 | 803,763 | 2,159,357 | 1,599,019 |
Loss on disposal of assets | 1,093 | |||
Other expense | 27,017 | 341,212 | ||
Loss from operations | (1,754,782) | (1,222,979) | (2,654,872) | (2,626,368) |
Foreign exchange (gain) loss | 2,384 | (867) | (4,092) | 2,655 |
Interest expense, net | 646,943 | 220,838 | 1,257,148 | 441,774 |
Loss before income tax expense | (2,404,109) | (1,442,950) | (3,907,928) | (3,070,797) |
Income tax expense | ||||
Net Loss | (2,404,109) | (1,442,950) | (3,907,928) | (3,070,797) |
Other Comprehensive Net (Loss) Income | ||||
Foreign currency translation | 7,973 | (601) | 4,097 | 2,287 |
Comprehensive Net Loss | $ (2,396,136) | $ (1,443,551) | $ (3,903,831) | $ (3,068,510) |
Basic and Diluted Net Loss Per Share | $ (1.13) | $ (0.76) | $ (1.83) | $ (1.63) |
Basic and Diluted Weighted-Average Common and Class A Restricted Voting Shares Outstanding | 2,133,512 | 1,887,843 | 2,131,499 | 1,887,843 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Common Shares [Member] | Class A Restricted Voting Shares [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at Dec. 31, 2015 | $ 59,462,420 | $ (42,931,749) | $ (30,623) | $ 16,500,048 | ||
Balance, shares at Dec. 31, 2015 | 1,294,018 | 593,826 | ||||
Stock- based compensation | 583,569 | 583,569 | ||||
Other comprehensive loss | 2,287 | 2,287 | ||||
Net loss | (3,070,797) | (3,070,797) | ||||
Balance at Jun. 30, 2016 | 60,045,989 | (46,002,546) | (28,336) | 14,015,107 | ||
Balance, shares at Jun. 30, 2016 | 1,294,018 | 593,826 | ||||
Balance at Dec. 31, 2016 | 64,986,368 | (53,642,691) | (39,466) | 11,304,211 | ||
Balance, shares at Dec. 31, 2016 | 2,030,800 | 97,674 | ||||
Stock- based compensation | 512,172 | 512,172 | ||||
Other comprehensive loss | 4,097 | 4,097 | ||||
Vesting of restricted share units | ||||||
Vesting of restricted share units, shares | 10,918 | |||||
Exchange of restricted voting shares for common shares | ||||||
Exchange of restricted voting shares for common shares, shares | 97,674 | (97,674) | ||||
Net loss | (3,907,928) | (3,907,928) | ||||
Balance at Jun. 30, 2017 | $ 65,498,540 | $ (57,550,619) | $ (35,369) | $ 7,912,552 | ||
Balance, shares at Jun. 30, 2017 | 2,139,392 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (3,907,928) | $ (3,070,797) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation and amortization | 2,159,357 | 1,599,019 |
Amortization of debt discount | 272,962 | |
Amortization of deferred financing costs | 63,837 | |
Stock-based compensation expense | 512,172 | 583,569 |
Loss on disposal of assets | 1,093 | |
Other non-cash asset writeoff | 178,147 | |
Changes in assets and liabilities: | ||
Accounts receivable | 38,189 | 163,567 |
Prepaid expenses and other current assets | (774,550) | 183,424 |
Other assets | 86,803 | 101,597 |
Accounts payable | (415,802) | 419,861 |
Accrued expenses | (185,906) | (942,355) |
Deferred revenue | 79,276 | 50,475 |
Due to / from related parties | 1,229,154 | (25,452) |
Deferred rent and other liabilities | 32,212 | 39,428 |
Net cash used in operating activities | (810,224) | (718,424) |
Cash flows from investing activities | ||
Capitalized software costs | (1,533,192) | (2,371,596) |
Purchases of property & equipment | (69,257) | (32,019) |
Proceeds from sale of intangible assets or equipment | 2,111 | |
Net cash used in investing activities | (1,602,449) | (2,401,504) |
Cash flows from financing activities | ||
Revolving credit facility payments | (56,225) | |
Capital lease payments | (88,041) | (99,860) |
Debt issuance costs | (64,615) | |
Net cash used in financing activities | (208,881) | (99,860) |
Effect of exchange rate changes on cash | 11,710 | (2,126) |
Net change in cash and cash equivalents | (2,609,844) | (3,221,914) |
Cash and cash equivalents at beginning of period | 6,053,203 | 7,554,128 |
Cash and cash equivalents at end of period | 3,443,359 | 4,332,214 |
Supplemental cash flow disclosure | ||
Cash paid for interest | 645,130 | 442,018 |
Cash paid for income taxes |
Description of Business and Goi
Description of Business and Going Concern | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Going Concern | 1. Description of Business and Going Concern Organization Frankly Inc. (“Frankly”), has been operating since the incorporation of its predecessor, TicToc Planet Inc. (“TicToc”), on September 10, 2012. These consolidated financial statements include Frankly and its subsidiaries (Frankly Co. and Frankly Media LLC), together referred to as the “Company.” On December 23, 2014, WB III, a Canadian public shell company traded on the Toronto Stock Exchange, completed a merger with TicToc whereby WB III Subco Inc., a wholly-owned subsidiary of the WB III, merged with TicToc. The transaction, referred to as the “Recapitalization”, was structured as a reverse triangular merger under the Delaware General Corporation Law, which resulted in TicToc becoming a wholly-owned Canadian subsidiary of WB III. Subsequent to the completion of the Recapitalization, WB III changed its name to Frankly Inc. and TicToc changed its name to Frankly Co. As described in Note 3, on August 25, 2015, the Company completed the purchase of the outstanding units of Gannaway Web Holdings LLC, operating as Worldnow, in a transaction referred to as the acquisition of Worldnow. Subsequent to the acquisition, Worldnow changed its name to Frankly Media LLC. On February 3, 2017, the Company effected a one-for-seventeen reverse split (the “Reverse Stock Split”) of its issued and outstanding common shares and Class A restricted voting shares. All warrant, option, restricted stock units (“RSU”), share and per share information in the consolidated financial statements gives retroactive effect to the Reverse Stock Split for all periods presented. Going Concern These consolidated financial statements have been prepared on the assumption that the Company is a going concern, which contemplates the realization of its assets and the settlement of its liabilities in the normal course of operations. As of June 30, 2017, the Company has an accumulated deficit of $57.6 million, representative of recurring losses since inception. Additionally, the Company had not generated positive cash flow from operations since inception, except in 2016. In the first half of 2017, the Company used cash in operations, and in the third quarter of 2017 paid off its revolving credit facility with Silicon Valley Bank (Note 10). The Company will need additional financing in the near term to continue operations. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company expects that through the next 12 months from the date of this filing, it will require external funding to sustain operations and to follow through on the execution of its business plan. The Company is considering several strategic alternatives which may include raising funds from strategic sources. The Company has retained the corporate advisory services of Waller Capital Partners, an independent investment bank and advisory firm, to explore and evaluate strategic options. There can be no assurance that the Company’s plans will materialize and/or that it will be successful in its efforts to obtain the funding to cover working capital shortfalls. These consolidated financial statements do not include any adjustments related to the carrying values and classifications of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates The unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include the accounts of Frankly Inc. and its wholly-owned subsidiaries Frankly Co. and Frankly Media LLC. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position for the periods presented. These unaudited interim condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period. The accompanying condensed consolidated balance sheet as of December 31, 2016 was derived from the audited financial statements as of that date, but does not include all the information and footnotes required by U.S. GAAP. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2016, included within its Form 10 as filed with the SEC on August 7, 2017. Accounting Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, actual results may differ from estimated amounts. Concentrations of Risk Accounts receivable are subject to credit risk and as of December 31, 2016 and June 30, 2017, two customers each accounted for greater than 10% of the Company’s accounts receivable balance. In total, these two customers accounted for 26% and 54% of the Company’s accounts receivable balance as of December 31, 2016 and June 30, 2017, respectively. Additionally, approximately 32% and 37% of the Company’s revenue for the six months ended June 30, 2016 and 2017 was generated from customers that accounted for greater than 10% of the Company’s total revenue. Recently Issued Accounting Pronouncements The Company is an “emerging growth company” as defined by the Jumpstart Our Business Startups (“JOBS”) Act of 2012. The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can selectively delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of this exemption and, as a result, its financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. Section 107 of the JOBS Act provides that the Company can elect to opt out of the extended transition period at any time, which election is irrevocable. ASU 2014-09: Revenue from Contracts with Customers (Topic 606) — ASU 2015-17: Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes ASU 2016-02: Leases (Topic 842) ASU 2016-09: Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting — |
Acquisition of Worldnow
Acquisition of Worldnow | 6 Months Ended |
Jun. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Worldnow | 3. Acquisition of Worldnow On July 28, 2015, the Company signed an agreement (the “Purchase Agreement”) to purchase all of the outstanding units of Gannaway Web Holdings LLC, operating as Worldnow, for total consideration of $45,000,000. On August 25, 2015 (the “Closing Date”), the Company completed the acquisition of Worldnow. Subsequent to the acquisition, Worldnow changed its name to Frankly Media LLC. The acquisition of Worldnow was made primarily to extend the reach of Frankly to Worldnow’s existing customer base within the local broadcast marketplace. Under the terms of the Purchase Agreement, the Company paid $10,000,000 in cash, issued $20,000,000 in Class A restricted voting shares of the Company (the “Share Consideration”) and executed promissory notes to two shareholders of Worldnow bearing simple interest at a rate of 5 percent per year and agreed to pay $15,000,000 on August 31, 2016 (See Note 6 and Note 10). The number of restricted voting shares comprising the Share Consideration was 574,836, determined with reference to the volume-weighted average price of the common shares of the Company on the TSX-V for the five days prior to the date of the Purchase Agreement (CDN$45.46 or $34.79). For purposes of the purchase price allocation, the Share Consideration, prior to discount for lack of marketability, was reflected at fair value as of the Closing Date which amounted to $15,523,058. All of the securities comprising the Share Consideration are subject to a lock-up agreement. The lock-up period with respect to securities representing 50 percent of the value of the Share Consideration expired August 25, 2016; and the lock-up period with respect to the remainder of the Share Consideration expired upon August 25, 2017. The lock-up periods are subject to earlier expiry upon the occurrence of certain events that constitute a change of control of the Company. |
Related Party Transactions and
Related Party Transactions and Balances | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Balances | 4. Related Party Transactions and Balances The Company has several significant shareholders as follows: SKP America LLC (“SKP America”), Raycom Media Inc. (“Raycom”), and Gannaway Entertainment Inc. (“GEI”) who each owned approximately 25.6%, 25.7% and 8.3%, respectively, as of both December 31, 2016 and June 30, 2017 of the aggregate Common Shares and Class A restricted voting shares. The following table summarizes related party balances in the condensed consolidated balance sheets for the periods presented: Amounts Due (to) from Related Parties December 31, 2016 June 30, 2017 (Unaudited) Non-revolving credit facility, net Raycom $ (11,630,384 ) $ (11,863,718 ) Due (to) from Raycom: Accounts receivable, net 295,231 2,008,333 Prepaid expenses and other current assets 70,000 (156,041 ) Accounts payable (159,385 ) (227,766 ) Deferred revenue (2,896,585 ) (5,486,085 ) Total due to Raycom (2,690,739 ) (3,861,559 ) Due from Mobdub: Prepaid expenses and other current assets 129,167 70,833 Total due from Mobdub 129,167 70,833 Total due (to) from related parties $ (2,561,572 ) $ (3,790,726 ) The following table summarizes related party transactions in the condensed consolidated statements of operations and comprehensive loss for the periods presented: Three Months Ended June 30, Six Months Ended June 30, Revenue (Expense) from Related Parties 2016 2017 2016 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Raycom: Revenue $ 1,264,015 $ 1,285,469 $ 2,554,751 $ 2,647,353 Interest on promissory notes (50,000 ) - (100,000 ) - Interest on non-revolving credit facility - (506,911 ) - (1,016,991 ) Interest on the Raycom Advance - (98,043 ) - (156,041 ) 1,214,015 680,515 2,454,751 1,474,321 GEI: Interest on promissory notes (137,500 ) - (275,000 ) - Mobdub: License fees (38,065 ) (29,166 ) (73,098 ) (58,333 ) (38,065 ) (29,166 ) (73,098 ) (58,333 ) $ 1,038,450 $ 651,349 $ 2,106,653 $ 1,415,988 Raycom As partial consideration for the acquisition of Worldnow on August 25, 2015, the Company issued a $4,000,000 promissory note to Raycom and 397,126 Class A restricted voting shares (Note 3). The note bore interest at 5% per annum and was due on August 31, 2016 (Note 6). Raycom was a customer and significant shareholder of Worldnow and, subsequent to the acquisition of Worldnow, remains a customer and significant shareholder of Frankly. Accordingly, during the three and six months ended June 30, 2016 and 2017, revenue-related transactions and balances with Raycom arose in the ordinary course of business. On September 1, 2016, the Company completed the closing of its financing with Raycom (Note 6). The Company received a non-revolving term line of credit from Raycom in the principal amount of $14.5 million and, subject to approval of Raycom, an additional available $1.5 million non-revolving line of credit (collectively, the “Loan”). The proceeds were used to pay down $14 million of the $15 million outstanding promissory notes. In addition, Raycom converted the remaining $1.0 million of its existing $4.0 million promissory note from the Company into 150,200 common shares of the Company and the Company issued 871,160 common share purchase warrants to Raycom. The Loan was recorded at fair value of $11,578,593 with the remaining $2,921,407 being allocated to the warrants. The carrying value of the Loan at December 31, 2016 and June 30, 2017, net of debt discount and deferred financing costs, was $11,630,384 and $11,863,718, respectively. Interest expense on the Loan amounted to $506,911 and $1,016,991 for the three and six months ended June 30, 2017, respectively, and is presented within interest expense, net on the consolidated statements of operations and comprehensive loss. On December 22, 2016, Raycom pre-paid $3 million of future fees for services to be provided by the Company (the “Advance Agreement”). On March 30, 2017, the Company entered into an amendment to the Advance Agreement pursuant to which Raycom pre-paid an additional $2 million of future fees for services to be provided by the Company. In connection with this agreement, the Company recognized interest expense of $98,043 and $156,041 for the three and six months ended June 30, 2017, respectively. GEI As partial consideration for the acquisition of Worldnow on August 25, 2015, the Company issued an $11,000,000 promissory note to GEI and 177,710 Class A restricted voting shares (Note 3). The note had interest at 5% per annum and was due on August 31, 2016 (Note 6, Note 10). On September 1, 2016, the promissory note to GEI was paid in full using the proceeds from the Raycom financing transaction discussed above. Mobdub The Company has a license agreement with a company that is owned by an officer of the Company. The agreement is for licensing of mobile applications and has a total contract value of $350,000. The period of the agreement is three years and commenced on October 14, 2015. |
Long-Lived Assets
Long-Lived Assets | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Long-Lived Assets | 5. Long-Lived Assets All of the Company’s long-lived assets are domiciled in the U.S. Depreciation and amortization expense for long-lived assets was as follows for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Depreciation of property and equipment $ 176,724 $ 152,486 $ 367,763 $ 307,335 Amortization of capitalized software 408,705 721,806 794,588 1,415,354 Amortization of other intangibles 218,334 218,334 436,668 436,668 Total depreciation and amortization $ 803,763 $ 1,092,626 $ 1,599,019 $ 2,159,357 Property and Equipment, Net The following table summarizes property and equipment, net, including assets held under capital lease: December 31, 2016 June 30, 2017 (Unaudited) Cost: Office and computer equipment and software $ 1,981,889 $ 2,025,950 Leasehold improvements 578,781 603,978 2,560,670 2,629,928 Accumulated depreciation and amortization: Office and computer equipment and software (926,901 ) (1,177,909 ) Leasehold improvements (152,441 ) (208,767 ) (1,079,342 ) (1,386,676 ) $ 1,481,328 $ 1,243,252 Depreciation expense for assets held under capital lease was $41,062, $82,124, $35,950 and $71,900, for the three and six months ended June 30, 2016 and 2017, respectively. The net carrying value of assets held under capital lease was $404,346 and $332,446 as of December 31, 2016 and June 30, 2017, respectively (Note 9). Software Development Costs, Net The following table summarizes software development costs, net for the periods presented: December 31, 2016 June 30, 2017 (Unaudited) Cost $ 9,001,660 $ 10,534,852 Accumulated amortization (2,291,166 ) (3,706,520 ) $ 6,710,494 $ 6,828,332 During the six months ended June 30, 2016 and 2017, the Company capitalized software development costs of $2,371,596 and $1,533,192, respectively. Goodwill The following table summarizes the changes in goodwill for the periods presented: Carrying Value Balance, December 31, 2015 $ 10,755,581 Impairment (4,209,000 ) Balance, December 31, 2016 $ 6,546,581 Activity - Balance, June 30, 2017 (Unaudited) $ 6,546,581 Other Intangible Assets, Net The following table summarizes intangible assets, net for the periods presented: December 31, 2016 June 30, 2017 (Unaudited) Cost: Broadcast relationships, 12-year useful life $ 7,600,000 $ 7,600,000 Advertiser relationships, 5-year useful life 1,200,000 1,200,000 8,800,000 8,800,000 Accumulated amortization: Broadcast relationships (844,448 ) (1,161,116 ) Advertiser relationships (320,000 ) (440,000 ) (1,164,448 ) (1,601,116 ) $ 7,635,552 $ 7,198,884 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt Non-revolving Credit Facility, Extinguishment of Promissory Notes and Old Revolving Credit Facility On September 1, 2016, the Company completed the closing of its financing with Raycom, a related party (Note 4). The Company received a non-revolving term line of credit from Raycom in the principal amount of $14.5 million and, subject to approval of Raycom, an additional available $1.5 million non-revolving line of credit (collectively, the “Loan”). In addition, Raycom converted $1.0 million of its existing $4.0 million promissory note from the Company into 150,200 common shares of the Company and the Company issued 871,160 warrants to Raycom entitling the holder of each warrant to acquire one common share of the Company upon exercise of each warrant at a price per common share equal to CDN$8.50 ($6.63 based on the exchange rate at August 18, 2016). The warrants will expire on the earlier of: (i) the repayment of the Loan in accordance with its terms; and (ii) 5 years. To the extent that there is a mandatory repayment of any portion of the principal balance of the Loan, a proportionate number of the warrants will have their term reduced to the later of one year from issuance and 30 days from the date of such repayment. The warrants were recorded within shareholders’ equity in accordance with ASC 470-20 - Debt With Conversion and Other Options The debt discount of $2,921,407 is being amortized to interest expense, net on the consolidated statement of operations and comprehensive loss using the effective-interest method. Amortization of debt discount included in interest expense, net for the three and six months ended June 30, 2017 amounted to $127,526 and $272,962, respectively. In accordance with ASC 470-50 Debt Modifications and Extinguishments Prior to the completion of the financing arrangements, Raycom held 397,125 voting shares of the Company, which represented approximately 21% of the issued and outstanding voting shares of the Company. Immediately following the completion of the financing transactions, Raycom held 547,325 voting shares of the Company and 871,160 warrants, which collectively represents approximately 27% of the issued and outstanding voting shares of the Company on a non-diluted basis. The proceeds of the Loan were used to pay off the outstanding $15.0 million of promissory notes issued by the Company in connection with the 2015 acquisition of Worldnow, including $3.0 million of the $4.0 million of such notes issued to Raycom, with the remaining $1.0 million promissory note balance owed to Raycom being converted to common shares of the Company as described above. The Loan has a five-year term and is secured by the grant of a security interest in the Company’s assets, a pledge of shares of the Company’s subsidiaries and a guarantee by the Company’s subsidiaries secured by their assets. Simultaneously, the Company and Raycom also entered into a software code escrow agreement. Interest on outstanding balances of the Loan will accrue at a rate of 10% per annum, with a default interest rate of 12% per annum. The Loan is subject to certain scheduled mandatory principal repayments, with additional mandatory repayments occurring upon the Company’s raising of additional financing, sales of assets and excess cash flow. Raycom Conversion The Company entered into a Securities Purchase Agreement with Raycom (the “Raycom Agreement”) dated June 26, 2017, pursuant to which it has agreed to issue to Raycom common shares and warrants in exchange for the reduction of $7,000,000 principal amount of indebtedness due to Raycom pursuant to the Loan and the associated promissory note. As a result of the transactions contemplated by the Raycom Agreement, the principal amount due to Raycom will reduce from $14,500,000 to $7,500,000. Pursuant to the Raycom Agreement, Raycom will receive (i) such number of our common shares as is equal to the Canadian dollar equivalent of $7,000,000 as of the date of the Raycom Agreement, divided by the greater of (A) 85% of the last closing price of our common shares on the TSX-V on the last trading day completed prior to the issuance of the news release announcing the execution of the Raycom Agreement, which closing price was CDN$4.89 ($3.69 based on the exchange rate on June 26, 2017), and (B) 85% of the Canadian dollar equivalent of the initial public offering price of securities sold in the Company’s U.S. initial public offering, and (ii) warrants to purchase up to 675,900 common shares. The warrants will have an exercise price per share equal to the greater of (A) the U.S. dollar equivalent of the last closing price of our common shares on the TSX-V on the last trading day completed prior to the issuance of the news release announcing the execution of the Raycom Agreement (being $3.69), or (B) 120% of the initial public offering price in the Company’s U.S. initial public offering, and will expire on August 31, 2021. The Raycom Conversion is subject to completion of the Company’s U.S. initial public offering with gross proceeds to us of at least $11,000,000 by October 31, 2017 and the listing of our common shares on NASDAQ. The Company applied the guidance within ASC 470-20-25-20 – General Contingent Conversion Options Promissory Notes Payable to Related Parties In connection with the acquisition of Worldnow on August 25, 2015 (Note 3), the Company executed unsecured promissory notes, bearing a simple interest at a rate of 5% per year, to pay an aggregate of $15,000,000 in cash on August 31, 2016. The holders of the promissory notes were Raycom ($4,000,000) and GEI ($11,000,000), former shareholders of Worldnow (Note 4). Interest expense on the promissory notes amounted to $187,500 and $375,000 for the three and six months ended June 30, 2016, respectively, and is presented within interest expense, net on the consolidated statements of operations and comprehensive loss. On September 1, 2016, the promissory notes were extinguished in connection with the refinancing transaction discussed above. Revolving Credit Facility – Silicon Valley Bank On December 28, 2016, the Company entered into the Loan and Security Agreement pursuant to which Silicon Valley Bank (“SVB”) issued to the Company a $3 million revolving line of credit (the “Revolving Credit Facility”). Subject to any adjustments upon an event of default, the principal amount outstanding under the line of credit had accrued interest at a floating per annum rate equal to 2.25% above the Prime Rate published on the Wall Street Journal, which interest was payable monthly and computed on the basis of a 360-day year for the actual number of days elapsed. As of December 31, 2016 and June 30, 2017, the principal amount outstanding under the Revolving Credit Facility was $1,375,474 and $1,319,249, respectively. On August 1, 2017, the Company repaid all amounts owed to SVB under these agreements and such agreements were terminated. Letter of Credit – Western Alliance Bank On August 31, 2016, in lieu of a security deposit under the lease dated October 26, 2010, with Metropolitan Life Insurance Company, for real property located at 27-01 Queens Plaza North, Long Island City, NY, Frankly Media LLC entered into a standby letter of credit with Western Alliance Bank for an amount of $500,000 (the “Letter of Credit”). For each advance, interest will accrue at a rate equal to the sum of (i) the Base Rate (as defined below), plus (ii) 3.50%, provided that such interest rate will change from time to time as the Base Rate changes. The “Base Rate” means the rate of interest used as the reference or base rate to establish the actual rates charged on commercial loans and which is publicly announced or reported from time to time by the Wall Street Journal as the “prime rate”. Interest will accrue from the date of the advance until such advance is paid in full. The Company has granted Western Alliance Bank a security interest in a $524,115 controlled cash deposit account together with (i) all interest, whether now accrued or hereafter accruing; (ii) all additional deposits hereafter made to the account; (iii) any and all proceeds from the account; and (iv) all renewals, replacements and substitutions for any of the foregoing. As of December 31, 2016 and June 30, 2017, no advances were made under the Letter of Credit. The cash security interest of $524,115 is presented within restricted cash on the consolidated balance sheet. |
Shareholders_ Equity
Shareholders’ Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Shareholders’ Equity | 7. Shareholders’ Equity Common Shares and Class A Restricted Voting Shares Subsequent to the Recapitalization on December 23, 2014, all common and Class A restricted voting shares and related stock-based grants have been denominated in Canadian dollars and have been translated to U.S. dollars using the exchange rate in effect at the date of transaction or grant, as applicable. The Class A restricted voting shares have the same voting rights as common shares except for voting for the election and removal of directors of the Company. The Class A restricted voting shares participate in dividends and liquidation events in the same manner as common shares. In terms of restrictions on transfer, no Class A restricted voting shares shall be transferred to another party unless an offer to acquire common shares is concurrently made that is identical to the offer for the Class A restricted voting shares in terms of price per share, percentage of outstanding shares to be transferred and in all other material respects. On February 3, 2017, the Company effected a one-for-seventeen reverse split (the “Reverse Stock Split”) of its issued and outstanding common shares and Class A restricted voting shares. All warrant, option, RSU, share and per share information in the consolidated financial statements gives retroactive effect to the Reverse Stock Split for all periods presented. Shares Issued During the Six Months Ended June 30, 2017 During the six months ended June 30, 2017, the Company issued a total of 10,918 common shares for employee and director RSUs that vested. In addition, the Company exchanged 97,674 Class A restricted shares for an equal number of common shares. Stock-Based Compensation Description of the Plan On April 1, 2015, the Company adopted an amended and restated equity incentive plan, which amends and restates the equity incentive plan, or the “Plan”, which was previously established as of December 23, 2014. On January 22, 2016, the Company and its Board of Directors (the “Board”) amended the Plan to fix the number of shares reserved for issuance of both stock options and RSUs at 336,183. Based on the number of outstanding options and RSUs as of June 30, 2017 and RSUs vested through June 30, 2017, the Company had 17,812 options or RSUs remaining for issuance under the Plan. The Company did not recognize any tax benefits for stock-based compensation during any of the periods presented. On March 2, 2017, the Company further amended the Plan so that upon its listing of its common shares on NASDAQ and completion of a public offering raising at least $5 million (the “Offering”), the maximum number of shares that may be granted under the Plan pursuant to options and RSUs shall be increased to a fixed number equal to 20% of the aggregate number of its common shares and Class A restricted voting shares outstanding at the closing of the Offering. On March 3, 2017, the Company cancelled all outstanding options granted under the Plan with an exercise price of CDN$17.00 or greater and issued one new option for each 1.7 canceled options. Stock Options The following table sets forth the activity for the Company’s stock options during the periods presented: Weighted Average Remaining Grant Date Contractual Shares Exercise Price Fair Value Term (Years) Balance, December 31, 2015 140,809 $ 35.53 $ 17.17 7.12 Granted 170,147 12.19 3.61 Exercised - - - Forfeited or canceled (65,194 ) 34.82 12.32 Balance, December 31, 2016 245,762 $ 19.52 $ 9.10 8.71 Vested and expected to vest, December 31, 2016 235,854 $ 19.62 $ 9.18 8.70 Exercisable, December 31, 2016 47,595 $ 29.18 $ 17.07 7.74 Unaudited interim activity: Balance, January 1, 2017 245,762 $ 19.52 $ 9.10 8.71 Adjustment - Balance, December 31, 2016 (53 )(a) - - Granted 61,851 5.44 3.12 Exercised - - - Forfeited or canceled (43,633 ) 20.22 9.63 Canceled (Option Replacement) (193,339 )(b) 19.90 9.11 Granted (Option Replacement) 113,677 (b) 5.30 9.11 Balance, June 30, 2017 184,265 $ 5.46 $ 6.96 8.08 Vested and expected to vest, June 30, 2017 177,960 $ 5.46 $ 7.02 8.05 Exercisable, June 30, 2017 58,168 $ 5.81 $ 10.40 6.69 (a) On February 3, 2017, the Company effected a one-for-seventeen reverse split. Upon finalizing the impact at the holder level, a small rounding adjustment was required to true-up options outstanding as of December 31, 2016. (b) On March 3, 2017, the Company cancelled all outstanding options granted under the Plan with an exercise price of CDN$17.00 or greater and issued one new option for each 1.7 canceled options (the “Option Replacement”). The Company accounted for the Option Replacement as a modification in accordance with ASC 718, Compensation—Stock Compensation. The aggregate intrinsic value of outstanding and exercisable stock options as of June 30, 2017 is $0. Restricted Share Units The following table sets forth the activity for the Company’s RSUs for the periods presented: Weighted-Average Grant Date Shares Fair Value Balance, December 31, 2015 35,767 21.26 Granted 60,832 6.38 Vested (5,299 ) 10.89 Forfeited or canceled (14,569 ) 36.35 Balance, December 31, 2016 76,731 $ 7.31 Unaudited interim activity: Balance, January 1, 2017 76,731 $ 7.31 Adjustment - Balance, December 31, 2016 (7 )(a) - Granted 52,836 5.21 Vested (10,918 ) 5.37 Forfeited or canceled (754 ) 6.44 Balance, June 30, 2017 117,888 $ 6.55 (a) On February 3, 2017, the Company effected a one-for-seventeen reverse split. Upon finalizing the impact at the holder level, a small rounding adjustment was required to true-up RSUs outstanding as of December 31, 2016. The RSUs granted during the three and six months ended June 30, 2017 had an aggregate fair value of $0 and $275,123, respectively, based on the closing price for common shares on the date of grant. Unrecognized compensation cost related to the Company’s non-vested RSUs was $369,976 as of December 31, 2016, which is expected to be recognized from 2017 through 2019. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The Company had $0 income tax expense for all periods presented. Deferred tax assets have been fully reserved given the Company’s history of losses. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Operating Lease Commitments The Company is obligated under several non-cancellable operating leases for office space, expiring in 2017 through 2023. The Company has one sublease for its excess office space as of December 31, 2016. The future aggregate minimum lease payments under these non-cancellable operating leases, without regard to subleases, are payable as follows as of December 31, 2016: Payments Due During the Years Ending December 31, Total 2017 $ 1,403,958 2018 1,381,158 2019 1,076,658 2020 852,908 2021 852,908 Thereafter 995,061 Total $ 6,562,651 Capital Lease Commitments The Company is party to various computer-related equipment leases that qualify as capital lease obligations, expiring in 2017 and 2018. The present value of the future minimum lease payments at inception of the lease is recorded as a capitalized asset within property and equipment (Note 5) with the related capital lease obligation as a liability in the accompanying consolidated balance sheets. Future minimum capital lease payments were payable as follows as of December 31, 2016: Payments Due During the Years Ending December 31, Total 2017 $ 173,224 2018 40,742 Total 213,966 Amount representing interest (5,882 ) Present value of minimum lease payments 208,084 Less current portion (167,635 ) Non-current portion $ 40,449 Employee Benefit Plan The Company’s subsidiaries, Frankly Co. and Frankly Media, have a 401(k) plan (the “Plan”), which covers all eligible employees. Under the Plan, employees may contribute from their gross salaries on a before tax basis up to annual statutory limits determined each year. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 10. Subsequent Events The Company has evaluated subsequent events through September 22, 2017 which is the date these unaudited interim condensed consolidated financial statements were available to be issued, and determined that there have been no events that have occurred that would require adjustments to or disclosure in the unaudited interim condensed consolidated financial statements except for the transactions described below. Legal Proceedings On July 21, 2017, a complaint was filed by GEI, Albert C. Gannaway III, and Samantha Gannaway, and was served on August 4, 2017, captioned Gannaway Entertainment, Inc., Albert C. Gannaway III, Samantha Gannaway V.S. Frankly Inc., Steve Chung, SKP America, LLC, JJR Private Capital Limited Partnership, Ron Schmeichel, Louis Schwartz in the United States District Court for the Northern District of California against the Company, the Company’s Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and others alleging violations of U.S. securities laws, fraud and breach of fiduciary duties, and seeking in excess of $15 million in damages, arising out of the Company’s acquisition of Gannaway Web Holdings, LLC from GEI and other parties in 2015. The Company is reviewing the complaint with its counsel and believe that the claims are without merit. The Company intends to defend the claims vigorously. U.S. Initial Public Offering (“IPO”) As a result of the complaint filed on July 21, 2017 as discussed above, the Company decided to postpone the U.S. IPO until the resolution of the litigation is more certain. ASC 340-10-S99-1 states that the deferred costs of an aborted offering may not be deferred and charged against proceeds of a subsequent offering. Any costs related to an aborted offering should be expensed in the period in which the company elects to abort the offering. A short postponement (up to 90 days) does not represent an aborted offering. Given the Company believes the litigation will not be resolved within 90 days, the offering will be deemed aborted for accounting purposes. As such, the Company will expense these deferred costs, which amounted to approximately $714,000 as of June 30, 2017, in the third quarter of 2017, the period in which the Company elected to postpone the offering. Silicon Valley Bank Line of Credit On August 1, 2017, the Company repaid all amounts owed to SVB under these agreements and such agreements were terminated. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates The unaudited interim condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and include the accounts of Frankly Inc. and its wholly-owned subsidiaries Frankly Co. and Frankly Media LLC. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position for the periods presented. These unaudited interim condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period. The accompanying condensed consolidated balance sheet as of December 31, 2016 was derived from the audited financial statements as of that date, but does not include all the information and footnotes required by U.S. GAAP. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31, 2016, included within its Form 10 as filed with the SEC on August 7, 2017. |
Accounting Estimates | Accounting Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, actual results may differ from estimated amounts. |
Concentrations of Risk | Concentrations of Risk Accounts receivable are subject to credit risk and as of December 31, 2016 and June 30, 2017, two customers each accounted for greater than 10% of the Company’s accounts receivable balance. In total, these two customers accounted for 26% and 54% of the Company’s accounts receivable balance as of December 31, 2016 and June 30, 2017, respectively. Additionally, approximately 32% and 37% of the Company’s revenue for the six months ended June 30, 2016 and 2017 was generated from customers that accounted for greater than 10% of the Company’s total revenue. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements The Company is an “emerging growth company” as defined by the Jumpstart Our Business Startups (“JOBS”) Act of 2012. The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can selectively delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to avail itself of this exemption and, as a result, its financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. Section 107 of the JOBS Act provides that the Company can elect to opt out of the extended transition period at any time, which election is irrevocable. ASU 2014-09: Revenue from Contracts with Customers (Topic 606) — ASU 2015-17: Income Taxes (Topic 740), Balance Sheet Classification of Deferred Taxes ASU 2016-02: Leases (Topic 842) ASU 2016-09: Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting — |
Related Party Transactions an18
Related Party Transactions and Balances (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Balances | The following table summarizes related party balances in the condensed consolidated balance sheets for the periods presented: Amounts Due (to) from Related Parties December 31, 2016 June 30, 2017 (Unaudited) Non-revolving credit facility, net Raycom $ (11,630,384 ) $ (11,863,718 ) Due (to) from Raycom: Accounts receivable, net 295,231 2,008,333 Prepaid expenses and other current assets 70,000 (156,041 ) Accounts payable (159,385 ) (227,766 ) Deferred revenue (2,896,585 ) (5,486,085 ) Total due to Raycom (2,690,739 ) (3,861,559 ) Due from Mobdub: Prepaid expenses and other current assets 129,167 70,833 Total due from Mobdub 129,167 70,833 Total due (to) from related parties $ (2,561,572 ) $ (3,790,726 ) |
Schedule of Operations and Comprehensive Loss | The following table summarizes related party transactions in the condensed consolidated statements of operations and comprehensive loss for the periods presented: Three Months Ended June 30, Six Months Ended June 30, Revenue (Expense) from Related Parties 2016 2017 2016 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Raycom: Revenue $ 1,264,015 $ 1,285,469 $ 2,554,751 $ 2,647,353 Interest on promissory notes (50,000 ) - (100,000 ) - Interest on non-revolving credit facility - (506,911 ) - (1,016,991 ) Interest on the Raycom Advance - (98,043 ) - (156,041 ) 1,214,015 680,515 2,454,751 1,474,321 GEI: Interest on promissory notes (137,500 ) - (275,000 ) - Mobdub: License fees (38,065 ) (29,166 ) (73,098 ) (58,333 ) (38,065 ) (29,166 ) (73,098 ) (58,333 ) $ 1,038,450 $ 651,349 $ 2,106,653 $ 1,415,988 |
Long-Lived Assets (Tables)
Long-Lived Assets (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Depreciation and Amortization Expense | Depreciation and amortization expense for long-lived assets was as follows for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2016 2017 2016 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Depreciation of property and equipment $ 176,724 $ 152,486 $ 367,763 $ 307,335 Amortization of capitalized software 408,705 721,806 794,588 1,415,354 Amortization of other intangibles 218,334 218,334 436,668 436,668 Total depreciation and amortization $ 803,763 $ 1,092,626 $ 1,599,019 $ 2,159,357 |
Schedule of Property and Equipment | The following table summarizes property and equipment, net, including assets held under capital lease: December 31, 2016 June 30, 2017 (Unaudited) Cost: Office and computer equipment and software $ 1,981,889 $ 2,025,950 Leasehold improvements 578,781 603,978 2,560,670 2,629,928 Accumulated depreciation and amortization: Office and computer equipment and software (926,901 ) (1,177,909 ) Leasehold improvements (152,441 ) (208,767 ) (1,079,342 ) (1,386,676 ) $ 1,481,328 $ 1,243,252 |
Summary of Software Development Costs | The following table summarizes software development costs, net for the periods presented: December 31, 2016 June 30, 2017 (Unaudited) Cost $ 9,001,660 $ 10,534,852 Accumulated amortization (2,291,166 ) (3,706,520 ) $ 6,710,494 $ 6,828,332 |
Summary of Changes in Goodwill | The following table summarizes the changes in goodwill for the periods presented: Carrying Value Balance, December 31, 2015 $ 10,755,581 Impairment (4,209,000 ) Balance, December 31, 2016 $ 6,546,581 Activity - Balance, June 30, 2017 (Unaudited) $ 6,546,581 |
Schedule of Intangible Assets | The following table summarizes intangible assets, net for the periods presented: December 31, 2016 June 30, 2017 (Unaudited) Cost: Broadcast relationships, 12-year useful life $ 7,600,000 $ 7,600,000 Advertiser relationships, 5-year useful life 1,200,000 1,200,000 8,800,000 8,800,000 Accumulated amortization: Broadcast relationships (844,448 ) (1,161,116 ) Advertiser relationships (320,000 ) (440,000 ) (1,164,448 ) (1,601,116 ) $ 7,635,552 $ 7,198,884 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Stock Options Activity | The following table sets forth the activity for the Company’s stock options during the periods presented: Weighted Average Remaining Grant Date Contractual Shares Exercise Price Fair Value Term (Years) Balance, December 31, 2015 140,809 $ 35.53 $ 17.17 7.12 Granted 170,147 12.19 3.61 Exercised - - - Forfeited or canceled (65,194 ) 34.82 12.32 Balance, December 31, 2016 245,762 $ 19.52 $ 9.10 8.71 Vested and expected to vest, December 31, 2016 235,854 $ 19.62 $ 9.18 8.70 Exercisable, December 31, 2016 47,595 $ 29.18 $ 17.07 7.74 Unaudited interim activity: Balance, January 1, 2017 245,762 $ 19.52 $ 9.10 8.71 Adjustment - Balance, December 31, 2016 (53 )(a) - - Granted 61,851 5.44 3.12 Exercised - - - Forfeited or canceled (43,633 ) 20.22 9.63 Canceled (Option Replacement) (193,339 )(b) 19.90 9.11 Granted (Option Replacement) 113,677 (b) 5.30 9.11 Balance, June 30, 2017 184,265 $ 5.46 $ 6.96 8.08 Vested and expected to vest, June 30, 2017 177,960 $ 5.46 $ 7.02 8.05 Exercisable, June 30, 2017 58,168 $ 5.81 $ 10.40 6.69 |
Schedule of Restricted Stock Units Activity | The following table sets forth the activity for the Company’s RSUs for the periods presented: Weighted-Average Grant Date Shares Fair Value Balance, December 31, 2015 35,767 21.26 Granted 60,832 6.38 Vested (5,299 ) 10.89 Forfeited or canceled (14,569 ) 36.35 Balance, December 31, 2016 76,731 $ 7.31 Unaudited interim activity: Balance, January 1, 2017 76,731 $ 7.31 Adjustment - Balance, December 31, 2016 (7 )(a) - Granted 52,836 5.21 Vested (10,918 ) 5.37 Forfeited or canceled (754 ) 6.44 Balance, June 30, 2017 117,888 $ 6.55 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Operating Lease Payments | The future aggregate minimum lease payments under these non-cancellable operating leases, without regard to subleases, are payable as follows as of December 31, 2016: Payments Due During the Years Ending December 31, Total 2017 $ 1,403,958 2018 1,381,158 2019 1,076,658 2020 852,908 2021 852,908 Thereafter 995,061 Total $ 6,562,651 |
Schedule of Future Minimum Capital Lease Payments | Future minimum capital lease payments were payable as follows as of December 31, 2016: Payments Due During the Years Ending December 31, Total 2017 $ 173,224 2018 40,742 Total 213,966 Amount representing interest (5,882 ) Present value of minimum lease payments 208,084 Less current portion (167,635 ) Non-current portion $ 40,449 |
Description of Business and G22
Description of Business and Going Concern (Details Narrative) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $ 57,550,619 | $ 53,642,691 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Narrative) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Accounts Receivable [Member] | Two Customers [Member] | |||
Concentration of risk percentage | 54.00% | 26.00% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | |||
Concentration of risk percentage | 37.00% | 32.00% |
Acquisition of Worldnow (Detail
Acquisition of Worldnow (Details Narrative) - USD ($) | Aug. 31, 2016 | Jul. 28, 2015 | Jun. 30, 2017 | Jun. 30, 2016 |
Debt interest rate | 10.00% | |||
Proceeds from debt | $ (64,615) | |||
Two Shareholders [Member] | ||||
Debt interest rate | 5.00% | |||
Proceeds from debt | $ 15,000,000 | |||
Class A Restricted Voting Shares [Member] | ||||
Total purchase consideration | $ 20,000,000 | |||
Number of restricted shares consideration | 574,836 | |||
Weighted average price per share | $ 34.79 | |||
Class A Restricted Voting Shares [Member] | CDN [Member] | ||||
Weighted average price per share | $ 45.46 | |||
Purchase Agreement [Member] | ||||
Payment to acquisitions | $ 10,000,000 | |||
Fair value of consideration | $ 15,523,058 | |||
Fair value of share consideration percentage | 50.00% | |||
Consideration expiration date | Aug. 25, 2016 | |||
Purchase Agreement [Member] | Gannaway Web Holdings LLC [Member] | ||||
Total purchase consideration | $ 45,000,000 |
Related Party Transactions an25
Related Party Transactions and Balances (Details Narrative) - USD ($) | Sep. 02, 2016 | Aug. 25, 2016 | Aug. 25, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Mar. 30, 2017 | Dec. 31, 2016 | Dec. 22, 2016 |
Debt interest rate | 10.00% | 10.00% | ||||||||
Non-revolving line of credit | $ 11,863,718 | $ 11,863,718 | $ 11,630,384 | |||||||
Proceeds from line of credit | (56,225) | |||||||||
Advance Agreement [Member] | ||||||||||
Pre-paid future fees | $ 2,000,000 | $ 3,000,000 | ||||||||
License Agreement [Member] | ||||||||||
Total contract value | $ 350,000 | $ 350,000 | ||||||||
SKP America LLC [Member] | ||||||||||
Ownership percentage | 25.60% | 25.60% | 25.60% | |||||||
Raycom Media Inc [Member] | ||||||||||
Ownership percentage | 25.70% | 25.70% | 25.70% | |||||||
Promissory note issued | $ 15,000,000 | $ 4,000,000 | ||||||||
Number of restricted voting shares | 397,126 | |||||||||
Debt interest rate | 5.00% | |||||||||
Debt due date | Aug. 31, 2016 | |||||||||
Line of credit principal amount | 14,500,000 | |||||||||
Non-revolving line of credit | 1,500,000 | $ (11,863,718) | $ (11,863,718) | $ (11,630,384) | ||||||
Proceeds from line of credit | 14,000,000 | |||||||||
Debt conversion of converted amount | 1,000,000 | |||||||||
Outstanding amount of promissory note | $ 4,000,000 | |||||||||
Debt converted into shares | 150,200 | |||||||||
Number of warrant to purchase shares of common stock | 871,160 | |||||||||
Fair value of loan | $ 11,578,593 | |||||||||
Fair value of warrants | $ 2,921,407 | |||||||||
Interest expense on credit facility | 506,911 | 1,016,991 | ||||||||
Interest expense | $ 98,043 | $ 156,041 | ||||||||
Gannaway Entertainment Inc [Member] | ||||||||||
Ownership percentage | 8.30% | 8.30% | 8.30% | |||||||
Promissory note issued | $ 11,000,000 | |||||||||
Number of restricted voting shares | 177,710 | |||||||||
Debt interest rate | 5.00% | |||||||||
Debt due date | Aug. 31, 2016 |
Related Party Transactions an26
Related Party Transactions and Balances - Summary of Related Party Balances (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 02, 2016 |
Non-revolving credit facility, net | $ 11,863,718 | $ 11,630,384 | |
Accounts receivable, net | 3,204,676 | 3,242,866 | |
Prepaid expenses and other current assets | 1,397,508 | 650,898 | |
Accounts payable | 4,286,960 | 4,687,581 | |
Total due to Raycom | 3,790,726 | 2,561,572 | |
Raycom Media Inc [Member] | |||
Non-revolving credit facility, net | (11,863,718) | (11,630,384) | $ 1,500,000 |
Accounts receivable, net | 2,008,333 | 295,231 | |
Prepaid expenses and other current assets | (156,041) | 70,000 | |
Accounts payable | (227,766) | (159,385) | |
Deferred revenue | (5,486,085) | (2,896,585) | |
Total due to Raycom | (3,861,559) | (2,690,739) | |
Mobdub [Member] | |||
Prepaid expenses and other current assets | 70,833 | 129,167 | |
Total due from Mobdub | 70,833 | 129,167 | |
Raycom Media Inc and Mobdub [Member] | |||
Total due (to) from related parties | $ (3,790,726) | $ (2,561,572) |
Related Party Transactions an27
Related Party Transactions and Balances - Schedule of Operations and Comprehensive Loss (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenue | $ 6,493,627 | $ 5,247,618 | $ 12,852,781 | $ 10,467,888 |
Revenue from related party | 651,349 | 1,038,450 | 1,415,988 | 2,106,653 |
License fees | (29,166) | (38,065) | (58,333) | (73,098) |
Raycom Media Inc [Member] | ||||
Revenue | 1,285,469 | 1,264,015 | 2,647,353 | 2,554,751 |
Interest on promissory notes | (50,000) | (100,000) | ||
Interest on non-revolving credit facility | (506,911) | (1,016,991) | ||
Interest on the Raycom Advance | (98,043) | (156,041) | ||
Revenue from related party | 680,515 | 1,214,015 | 1,474,321 | 2,454,751 |
Gannaway Entertainment Inc [Member] | ||||
Interest on promissory notes | (137,500) | (275,000) | ||
Mobdub [Member] | ||||
License fees | $ (29,166) | $ (38,065) | $ (58,333) | $ (73,098) |
Long-Lived Assets (Details Narr
Long-Lived Assets (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Depreciation expense under capital lease | $ 82,124 | $ 41,062 | $ 71,900 | $ 35,950 | |
Net carrying value of assets held under capital lease | $ 332,446 | 332,446 | $ 404,346 | ||
Capitalized software costs | $ 1,533,192 | $ 2,371,596 |
Long-Lived Assets - Schedule of
Long-Lived Assets - Schedule of Depreciation and Amortization Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Depreciation of property and equipment | $ 152,486 | $ 176,724 | $ 307,335 | $ 367,763 |
Amortization of capitalized software | 721,806 | 408,705 | 1,415,354 | 794,588 |
Amortization of other intangibles | 218,334 | 218,334 | 436,668 | 436,668 |
Total depreciation and amortization | $ 1,092,626 | $ 803,763 | $ 2,159,357 | $ 1,599,019 |
Long-Lived Assets - Schedule 30
Long-Lived Assets - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Property and equipment, gross | $ 2,629,928 | $ 2,560,670 |
Accumulated depreciation and amortization | (1,386,676) | (1,079,342) |
Property and equipment, net | 1,243,252 | 1,481,328 |
Office and Computer Equipment and Software [Member] | ||
Property and equipment, gross | 2,025,950 | 1,981,889 |
Accumulated depreciation and amortization | (1,177,909) | (926,901) |
Leasehold Improvements [Member] | ||
Property and equipment, gross | 603,978 | 578,781 |
Accumulated depreciation and amortization | $ (208,767) | $ (152,441) |
Long-Lived Assets - Summary of
Long-Lived Assets - Summary of Software Development Costs (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Cost | $ 10,534,852 | $ 9,001,660 |
Accumulated amortization | (3,706,520) | (2,291,166) |
Software development costs, net | $ 6,828,332 | $ 6,710,494 |
Long-Lived Assets - Summary o32
Long-Lived Assets - Summary of Changes in Goodwill (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Balance, Beginning | $ 6,546,581 | $ 10,755,581 |
Impairment | (4,209,000) | |
Activity | ||
Balance, Ending | $ 6,546,581 | $ 6,546,581 |
Long-Lived Assets - Schedule 33
Long-Lived Assets - Schedule of Intangible Assets (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Intangible assets, gross | $ 8,800,000 | $ 8,800,000 |
Accumulated amortization | (1,601,116) | (1,164,448) |
Intangible assets, net | 7,198,884 | 7,635,552 |
Broadcast Relationships [Member] | ||
Intangible assets, gross | 7,600,000 | 7,600,000 |
Accumulated amortization | $ (1,161,116) | (844,448) |
Intangible assets useful life | 12 years | |
Advertiser Relationships [Member] | ||
Intangible assets, gross | $ 1,200,000 | 1,200,000 |
Accumulated amortization | $ (440,000) | $ (320,000) |
Intangible assets useful life | 5 years |
Debt (Details Narrative)
Debt (Details Narrative) | Mar. 02, 2017USD ($) | Sep. 02, 2016USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Jun. 30, 2017CAD / shares | Dec. 31, 2016USD ($) | Dec. 28, 2016USD ($) | Sep. 02, 2016CAD / shares | Aug. 31, 2016USD ($) | Aug. 25, 2016 | Aug. 25, 2015 |
Non-revolving line of credit | $ 11,863,718 | $ 11,863,718 | $ 11,630,384 | ||||||||||
Debt discount | 2,921,407 | 2,921,407 | |||||||||||
Amortization of debt discount | 127,526 | 272,962 | |||||||||||
Legal fees | 206,805 | ||||||||||||
Amortization of deferred financing costs | $ 17,879 | 24,988 | |||||||||||
Proceeds from loan repayment | 15,000,000 | ||||||||||||
Total debt issued amount | $ 4,000,000 | ||||||||||||
Debt interest rate | 10.00% | 10.00% | |||||||||||
Default interest rate | 12.00% | 12.00% | |||||||||||
Proceeds from issuance of initial public offering | $ 5,000,000 | ||||||||||||
Revolving line of credit | $ 1,319,249 | $ 1,319,249 | 1,375,474 | ||||||||||
Cash security interest | $ 524,115 | $ 524,115 | $ 524,115 | ||||||||||
Letter of Credit Western Alliance Bank [Member] | |||||||||||||
Revolving line of credit | $ 500,000 | ||||||||||||
Line of credit interest rate | 3.50% | ||||||||||||
Security deposit | $ 524,115 | ||||||||||||
Raycom Media Inc [Member] | |||||||||||||
Note payable to related party | 4,000,000 | ||||||||||||
Gannaway Web Holdings LLC [Member] | |||||||||||||
Note payable to related party | 11,000,000 | ||||||||||||
Acquisition of Worldnow [Member] | Unsecured Promissory Notes [Member] | |||||||||||||
Debt interest rate | 5.00% | ||||||||||||
Note payable to related party | $ 15,000,000 | ||||||||||||
Interest expense on debt | $ 187,500 | 375,000 | |||||||||||
Warrant One [Member] | |||||||||||||
Number of warrant to purchase shares of common stock | shares | 751,000 | 751,000 | |||||||||||
Dividend yield | 0.00% | ||||||||||||
Risk free rate | 0.66% | ||||||||||||
Volatility | 71.14% | ||||||||||||
Expected term | 5 years | ||||||||||||
Forfeiture rate | 0.00% | ||||||||||||
Warrant Two [Member] | |||||||||||||
Number of warrant to purchase shares of common stock | shares | 120,160 | 120,160 | |||||||||||
Dividend yield | 0.00% | ||||||||||||
Risk free rate | 0.56% | ||||||||||||
Volatility | 71.14% | ||||||||||||
Expected term | 7 months | ||||||||||||
Forfeiture rate | 0.00% | ||||||||||||
Raycom Media Inc [Member] | |||||||||||||
Line of credit principal amount | $ 14,500,000 | ||||||||||||
Non-revolving line of credit | 1,500,000 | $ (11,863,718) | $ (11,863,718) | ||||||||||
Debt conversion of converted amount | 1,000,000 | ||||||||||||
Existing amount of promissory note | $ 4,000,000 | ||||||||||||
Debt converted into shares | shares | 150,200 | ||||||||||||
Number of warrant to purchase shares of common stock | shares | 871,160 | ||||||||||||
Warrant exercise price | $ / shares | $ 6.63 | ||||||||||||
Warrant term | 5 years | ||||||||||||
Fair value of loan | $ 11,578,593 | ||||||||||||
Fair value of warrants | $ 2,921,407 | ||||||||||||
Number of voting shares held by company | Prior to the completion of the financing arrangements, Raycom held 397,125 voting shares of the Company, which represented approximately 21% of the issued and outstanding voting shares of the Company. Immediately following the completion of the financing transactions, Raycom held 547,325 voting shares of the Company and 871,160 warrants, which collectively represents approximately 27% of the issued and outstanding voting shares of the Company on a non-diluted basis. | ||||||||||||
Total debt issued amount | $ 3,000,000 | ||||||||||||
Due to related party | 1,000,000 | 1,000,000 | |||||||||||
Debt interest rate | 5.00% | ||||||||||||
Interest expense on debt | $ (50,000) | $ (100,000) | |||||||||||
Raycom Media Inc [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Debt conversion of converted amount | $ 7,000,000 | ||||||||||||
Number of warrant to purchase shares of common stock | shares | 675,900 | 675,900 | |||||||||||
Debt reduction of principal amount | $ 7,000,000 | $ 7,000,000 | |||||||||||
Closing price of common shares percentage | 85.00% | ||||||||||||
Closing price per share | $ / shares | $ 3.69 | $ 3.69 | |||||||||||
Percentage of initial public offering | 120.00% | 120.00% | |||||||||||
Raycom Media Inc [Member] | Securities Purchase Agreement [Member] | October 31, 2017 [Member] | |||||||||||||
Proceeds from issuance of initial public offering | $ 11,000,000 | ||||||||||||
Raycom Media Inc [Member] | Securities Purchase Agreement [Member] | Maximum [Member] | |||||||||||||
Debt principal amount | $ 14,500,000 | 14,500,000 | |||||||||||
Raycom Media Inc [Member] | Securities Purchase Agreement [Member] | Minimum [Member] | |||||||||||||
Debt principal amount | $ 7,500,000 | $ 7,500,000 | |||||||||||
Raycom Media Inc [Member] | CDN [Member] | |||||||||||||
Warrant exercise price | CAD / shares | CAD 8.50 | ||||||||||||
Raycom Media Inc [Member] | CDN [Member] | Securities Purchase Agreement [Member] | |||||||||||||
Closing price per share | CAD / shares | CAD 4.89 | ||||||||||||
Silicon Valley Bank [Member] | Loan and Security Agreement [Member] | |||||||||||||
Revolving line of credit | $ 3,000,000 | ||||||||||||
Line of credit interest rate | 2.25% |
Shareholders_ Equity (Details N
Shareholders’ Equity (Details Narrative) | Mar. 03, 2017$ / shares | Mar. 03, 2017CAD / shares | Mar. 02, 2017USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / shares | Jan. 22, 2016shares |
Proceeds from initial public offering | $ | $ 5,000,000 | ||||||
Number of common shares percentage under plan | 20.00% | ||||||
Exercise price of option cancelled | $ / shares | $ 1.7 | ||||||
Number of restricted stock shares granted | $ | |||||||
CDN [Member] | |||||||
Exercise price of option cancelled | CAD / shares | CAD 17 | ||||||
Stock Option [Member] | |||||||
Number of shares reserved for issuance | 336,183 | ||||||
Number of options or RSUs shares issued | 17,812 | ||||||
Exercise price of option cancelled | $ / shares | $ 20.22 | $ 34.82 | |||||
Aggregate intrinsic value of outstanding | $ | $ 0 | $ 0 | |||||
Aggregate intrinsic value of exercisable | $ | 0 | $ 0 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||
Number of shares reserved for issuance | 336,183 | ||||||
Number of options or RSUs shares issued | 17,812 | ||||||
Number of restricted stock shares granted | $ | $ 0 | $ 275,123 | |||||
Unrecognized compensation cost | $ | $ 369,976 | ||||||
Class A Restricted Shares [Member] | |||||||
Number of restricted stock unit shares issued | 97,674 | ||||||
Employee [Member] | |||||||
Number of restricted stock unit shares issued | 10,918 | ||||||
Director [Member] | |||||||
Number of restricted stock unit shares issued | 10,918 |
Shareholders_ Equity - Schedule
Shareholders’ Equity - Schedule of Stock Options Activity (Details) - $ / shares | Mar. 03, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Weighted average exercise price, forfeited or canceled | $ 1.7 | |||
Stock Option [Member] | ||||
Number of shares, beginning | 245,762 | 140,809 | ||
Number of shares, granted | 61,851 | 170,147 | ||
Number of shares, exercised | ||||
Number of shares, forfeited or canceled | (43,633) | (65,194) | ||
Number of shares, Canceled (Option Replacement) | [1] | (193,339) | ||
Number of shares, Granted (Option Replacement) | [1] | 113,677 | ||
Number of shares, ending | 184,265 | 245,762 | ||
Number of shares, vested and expected to vest ending | 177,960 | 235,854 | ||
Number of shares, exercisable ending | 58,168 | 47,595 | ||
Weighted average exercise price, beginning | $ 19.52 | $ 35.53 | ||
Weighted average exercise price, granted | 5.44 | 12.19 | ||
Weighted average exercise price, exercised | ||||
Weighted average exercise price, forfeited or canceled | 20.22 | 34.82 | ||
Weighted average exercise price, Canceled (Option Replacement) | 19.90 | |||
Weighted average exercise price, Granted (Option Replacement) | 5.30 | |||
Weighted average exercise price, ending | 5.46 | 19.52 | ||
Weighted average exercise price, vested and expected to vest ending | 5.46 | 19.62 | ||
Weighted average exercise price, exercisable ending | 5.81 | 29.18 | ||
Weighted average grant date fair value, beginning | 9.10 | 17.17 | ||
Weighted average grant date fair value, granted | 3.12 | 3.61 | ||
Weighted average grant date fair value, exercised | ||||
Weighted average grant date fair value, forfeited or canceled | 9.63 | 12.32 | ||
Weighted average grant date fair value, Canceled (Option Replacement) | 9.11 | |||
Weighted average grant date fair value, Granted (Option Replacement) | 9.11 | |||
Weighted average grant date fair value, ending | 6.96 | 9.10 | ||
Weighted average grant date fair value, vested and expected to vest ending | 7.02 | 9.18 | ||
Weighted average grant date fair value, exercisable ending | $ 10.40 | $ 17.07 | ||
Weighted average remaining contractual term (years), beginning | 8 years 8 months 16 days | 7 years 1 month 13 days | ||
Weighted average remaining contractual term (years), ending | 8 years 29 days | 8 years 8 months 16 days | ||
Weighted average remaining contractual term (years), vested and expected to vest ending | 8 years 18 days | 8 years 8 months 12 days | ||
Weighted average remaining contractual term (years), exercisable ending | 6 years 8 months 9 days | 7 years 8 months 26 days | ||
Stock Option [Member] | Adjustment [Member] | ||||
Number of shares, beginning | [2] | (53) | ||
Number of shares, ending | [2] | (53) | ||
Weighted average exercise price, beginning | ||||
Weighted average exercise price, ending | ||||
Weighted average grant date fair value, beginning | ||||
Weighted average grant date fair value, ending | ||||
[1] | On March 3, 2017, the Company cancelled all outstanding options granted under the Plan with an exercise price of CDN$17.00 or greater and issued one new option for each 1.7 canceled options (the "Option Replacement"). The Company accounted for the Option Replacement as a modification in accordance with ASC 718, Compensation-Stock Compensation. The Company canceled 193,339 existing options (the "original options") and concurrently granted 113,677 replacement options (the "replacement options"). The total stock-based compensation expense recognized by the Company for the six months ended June 30, 2017, relating to the Option replacement, was computed using the original grant date fair value of the original options, plus the incremental fair value calculated as the excess of the fair value of the replacement options over the fair value of the original options on the modification date. | |||
[2] | On February 3, 2017, the Company effected a one-for-seventeen reverse split. Upon finalizing the impact at the holder level, a small rounding adjustment was required to true-up options outstanding as of December 31, 2016. |
Shareholders_ Equity - Schedu37
Shareholders’ Equity - Schedule of Stock Options Activity (Details) (Parenthetical) | Mar. 03, 2017$ / shares | Mar. 03, 2017CAD / shares | Feb. 03, 2017 | Jun. 30, 2017$ / sharesshares | Dec. 31, 2016$ / shares | |
Reverse stock split | one-for-seventeen reverse split | |||||
Exercise price of option cancelled | $ / shares | $ 1.7 | |||||
Stock Option [Member] | ||||||
Exercise price of option cancelled | $ / shares | $ 20.22 | $ 34.82 | ||||
Number of shares, Canceled (Option Replacement) | shares | [1] | 193,339 | ||||
Number of shares, Granted (Option Replacement) | shares | [1] | 113,677 | ||||
CDN [Member] | ||||||
Exercise price of option cancelled | CAD / shares | CAD 17 | |||||
[1] | On March 3, 2017, the Company cancelled all outstanding options granted under the Plan with an exercise price of CDN$17.00 or greater and issued one new option for each 1.7 canceled options (the "Option Replacement"). The Company accounted for the Option Replacement as a modification in accordance with ASC 718, Compensation-Stock Compensation. The Company canceled 193,339 existing options (the "original options") and concurrently granted 113,677 replacement options (the "replacement options"). The total stock-based compensation expense recognized by the Company for the six months ended June 30, 2017, relating to the Option replacement, was computed using the original grant date fair value of the original options, plus the incremental fair value calculated as the excess of the fair value of the replacement options over the fair value of the original options on the modification date. |
Shareholders_ Equity - Schedu38
Shareholders’ Equity - Schedule of Restricted Stock Units Activity (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | ||
Number of shares, beginning | 76,731 | 35,767 | |
Number of shares, granted | 52,836 | 60,832 | |
Number of shares, vested | (10,918) | (5,299) | |
Number of shares, forfeited or canceled | (754) | (14,569) | |
Number of shares, ending | 117,888 | 76,731 | |
Weighted average grant date fair value, beginning | $ 7.31 | $ 21.26 | |
Weighted average grant date fair value, granted | 5.21 | 6.38 | |
Weighted average grant date fair value, vested | 5.37 | 10.89 | |
Weighted average grant date fair value, forfeited or canceled | 6.44 | 36.35 | |
Weighted average grant date fair value, ending | $ 6.55 | $ 7.31 | |
Adjustment [Member] | |||
Number of shares, beginning | [1] | (7) | |
Number of shares, granted | |||
Number of shares, ending | [1] | (7) | |
Weighted average grant date fair value, beginning | |||
Weighted average grant date fair value, granted | |||
Weighted average grant date fair value, ending | |||
[1] | On February 3, 2017, the Company effected a one-for-seventeen reverse split. Upon finalizing the impact at the holder level, a small rounding adjustment was required to true-up RSUs outstanding as of December 31, 2016. |
Shareholders_ Equity - Schedu39
Shareholders’ Equity - Schedule of Restricted Stock Units Activity (Details) (Parenthetical) | Feb. 03, 2017 |
Equity [Abstract] | |
Reverse stock split | one-for-seventeen reverse split |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense |
Commitments and Contingencies41
Commitments and Contingencies (Details Narrative) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease expiring year | expiring in 2017 through 2023 |
Capital lease expiring year | expiring in 2017 and 2018 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Operating Lease Payments (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 1,403,958 |
2,018 | 1,381,158 |
2,019 | 1,076,658 |
2,020 | 852,908 |
2,021 | 852,908 |
Thereafter | 995,061 |
Total | $ 6,562,651 |
Commitments and Contingencies43
Commitments and Contingencies - Schedule of Future Minimum Capital Lease Payments (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
2,017 | $ 173,224 | |
2,018 | 40,742 | |
Total | 213,966 | |
Amount representing interest | (5,882) | |
Present value of minimum lease payments | 208,084 | |
Less current portion | $ (120,042) | (167,635) |
Non-current portion | $ 40,449 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Jul. 21, 2017 | Jun. 30, 2017 |
Damages sought value | $ 15,000,000 | |
Deferred cost | $ 714,000 |