Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 14, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Touchpoint Group Holdings Inc. | |
Entity Central Index Key | 0000225211 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Current reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 3,936,600 | |
Entity File Number | 001-36530 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 497 | $ 313 |
Accounts receivable, net | 80 | |
Prepaid compensation | 550 | 550 |
Investment | 100 | 100 |
Other receivable | 500 | 2,022 |
Advances to acquisition target | 210 | 70 |
Other current assets | 326 | 381 |
Current assets of continued items | 2,263 | 3,436 |
Current assets of discontinued items | 29 | 586 |
Total current assets | 2,292 | 4,022 |
Intangible assets, net | 2,527 | 2,908 |
Prepaid compensation, net of current portion | 1,055 | 1,467 |
Non-current assets of discontinued operations | 34 | 2,528 |
Total assets | 5,908 | 10,925 |
Current liabilities: | ||
Accounts payable | 509 | 311 |
Accrued expenses | 168 | 121 |
Accrued compensation | 268 | 181 |
Notes payable | 723 | |
Amount due to related parties | 6 | |
Promissory notes, related parties | 1,000 | 1,000 |
Current liabilities of continued operations | 2,674 | 1,613 |
Current liabilities of discontinued operations | 404 | 842 |
Total current liabilities | 3,078 | 2,455 |
Long-term liabilities | ||
Non-current liabilities of discontinued operations | 27 | |
Total liabilities | 3,105 | 2,455 |
Temporary Equity - redeemable common stock outstanding 33,945 shares | 605 | 605 |
Stockholders' Equity | ||
Preferred stock: $0.0001 par value, authorized 50,000,000; No shares issued and outstanding | ||
Common stock: $0.0001 par value, authorized 200,000,000 shares; issued and outstanding 3,897,177 shares as of September 30, 2019 (December 2018 – 3,502,387) | 2 | 8 |
Additional paid-in capital | 61,714 | 62,600 |
Share subscription receivable | (1,425) | |
Accumulated (Deficit) | (60,496) | (54,854) |
Accumulated other comprehensive income | (24) | (35) |
Total Touchpoint Group Holdings Inc. stockholders' equity | 1,196 | 6,294 |
Non-controlling interest | 1,002 | 1,571 |
Total stockholders' equity | 2,198 | 7,865 |
Total liabilities and stockholders' equity | $ 5,908 | $ 10,925 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Redeemable common stock outstanding | 33,945 | 33,945 |
Preferred stock: par value | $ 0.0001 | $ 0.0001 |
Preferred stock: authorized | 50,000,000 | 50,000,000 |
Preferred stock: issued | ||
Preferred stock: outstanding | ||
Common stock: par value | $ 0.0001 | $ 0.0001 |
Common stock: authorized | 200,000,000 | 200,000,000 |
Common stock: issued | 3,897,177 | 3,502,387 |
Common stock: outstanding | 3,897,177 | 3,502,387 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | $ 82 | $ 3 | $ 130 | $ 108 |
Cost of revenue: | ||||
Total cost of revenue | 139 | 109 | 419 | 338 |
Gross deficit | (57) | (106) | (289) | (230) |
Expenses: | ||||
General and administrative | 1,047 | 1,157 | 2,627 | 4,158 |
Depreciation | 1 | 1 | ||
Acquisition services | 1,874 | |||
Total expenses | 1,047 | 1,157 | 2,628 | 6,033 |
Loss from operations | (1,104) | (1,263) | (2,917) | (6,263) |
Other income and expense: | ||||
Interest expense | (39) | (18) | (64) | (408) |
Foreign exchange | (2) | (3) | (4) | (4) |
Other income | 553 | |||
Total other income and expense | (41) | (21) | 485 | (412) |
Loss on continuing operations | (1,145) | (1,284) | (2,432) | (6,675) |
Loss from discontinued operations | (2,777) | (1,211) | (3,330) | (2,042) |
Net loss for the period | (3,922) | (2,495) | (5,762) | (8,717) |
Net loss attributable to non-controlling interest | 20 | 186 | 120 | 652 |
Net loss attributable to Touchpoint Group Holdings Inc. common stockholders | $ (3,902) | $ (2,309) | $ (5,642) | $ (8,065) |
Earnings per share | ||||
Basic and diluted net loss per share - continuing operations | $ (0.30) | $ (0.62) | $ (0.67) | $ (3.97) |
Basic and diluted net loss per share - discontinued operations | $ (0.73) | $ (0.58) | $ (0.91) | $ (1.21) |
Weighted average number of shares outstanding | ||||
Basic and diluted | 3,823 | 2,086 | 3,655 | 1,682 |
Software Costs | ||||
Cost of revenue: | ||||
Total cost of revenue | $ 4 | |||
Amortization of Intangible Assets | ||||
Cost of revenue: | ||||
Total cost of revenue | $ 139 | $ 109 | $ 415 | $ 338 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (3,902) | $ (2,309) | $ (5,642) | $ (8,065) |
Other comprehensive income: | ||||
Foreign currency translation adjustment (loss) gain | (1) | 11 | (15) | |
Total comprehensive loss | $ (3,902) | $ (2,310) | $ (5,631) | $ (8,080) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Mezzanine Equity | Common Stock | Additional Paid-In | Stock Subscription Receivable | Accumulated Deficit | Accumulated Other Comprehensive Income | Stock subscription receivable | Non-Controlling Interest | Total |
Balance at beginning at Dec. 31, 2017 | $ 1 | $ 48,358 | $ (41,085) | $ (22) | $ 7,252 | ||||
Balance at beginning (in shares) at Dec. 31, 2017 | 1,210 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (2,574) | (120) | (2,694) | ||||||
Foreign currency translation | (1) | (1) | |||||||
Issuance of shares for services | $ 199 | 728 | 728 | ||||||
Issuance of shares for services (in shares) | 7 | 19 | |||||||
Issuance of shares for acquisitions | $ 93 | 2,507 | 1,353 | 3,860 | |||||
Issuance of shares for acquisitions (in shares) | |||||||||
Shares issued for exercise of warrants | 563 | 563 | |||||||
Shares issued for exercise of warrants (in shares) | 30 | ||||||||
Issuance of shares for conversion of debt | $ 406 | ||||||||
Issuance of shares for conversion of debt (in shares) | 27 | ||||||||
Conversion benefit on convertible notes | 200 | 200 | |||||||
Balance at ending at Mar. 31, 2018 | $ 605 | $ 1 | 52,356 | (43,659) | (23) | 1,233 | 9,908 | ||
Balance at ending (in shares) at Mar. 31, 2018 | 34 | 1,352 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (3,182) | (346) | (3,528) | ||||||
Foreign currency translation | (13) | (13) | |||||||
Issuance of shares for services | 2,897 | 2,897 | |||||||
Issuance of shares for services (in shares) | 185 | ||||||||
Issuance of shares for acquisitions | $ 1 | 5,422 | 4,937 | 10,360 | |||||
Issuance of shares for acquisitions (in shares) | 312 | ||||||||
Shares issued for exercise of warrants | 795 | (370) | 425 | ||||||
Shares issued for exercise of warrants (in shares) | 108 | ||||||||
Increase in service compensation due to change in exercise price | 403 | 403 | |||||||
Issuance of shares for cash | 350 | 350 | |||||||
Issuance of shares for cash (in Shares) | 70 | ||||||||
Issuance of shares for exercise of convertible promissory notes | 406 | 406 | |||||||
Issuance of shares for exercise of convertible promissory notes (in shares) | 27 | ||||||||
Balance at ending at Jun. 30, 2018 | $ 605 | $ 2 | 62,629 | (46,841) | (36) | (370) | 5,824 | 21,208 | |
Balance at ending (in shares) at Jun. 30, 2018 | 34 | 2,054 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (2,309) | (186) | (2,495) | ||||||
Foreign currency translation | (1) | (1) | |||||||
Shares issued for exercise of warrants | 73 | 73 | |||||||
Shares issued for exercise of warrants (in shares) | 39 | ||||||||
Receipt of stock subscription receivable | (185) | 370 | 185 | ||||||
Shares issued for sale of stock | 474 | 474 | |||||||
Shares issued for sale of stock, shares | 241 | ||||||||
Increase in service compensation due to change in exercise price | 141 | 141 | |||||||
Shares issued for services to be provided | 175 | 175 | |||||||
Shares issued for services to be provided (in Shares) | 40 | ||||||||
Balance at ending at Sep. 30, 2018 | $ 605 | $ 2 | 63,307 | (49,150) | (37) | 5,638 | 19,760 | ||
Balance at ending (in shares) at Sep. 30, 2018 | 34 | 2,374 | |||||||
Balance at beginning at Dec. 31, 2018 | $ 605 | $ 2 | 62,606 | (1,425) | (54,854) | (35) | 1,571 | 7,865 | |
Balance at beginning (in shares) at Dec. 31, 2018 | 34 | 3,502 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (656) | (34) | (690) | ||||||
Foreign currency translation | 11 | 11 | |||||||
Disposal of equity in Banana Whale Studios PTE Limited | (449) | (449) | |||||||
Balance at ending at Mar. 31, 2019 | $ 605 | $ 2 | 62,606 | (1,425) | (55,510) | (24) | 1,088 | 6,737 | |
Balance at ending (in shares) at Mar. 31, 2019 | 34 | 3,502 | |||||||
Balance at beginning at Dec. 31, 2018 | $ 605 | $ 2 | 62,606 | (1,425) | (54,854) | (35) | 1,571 | 7,865 | |
Balance at beginning (in shares) at Dec. 31, 2018 | 34 | 3,502 | |||||||
Balance at ending at Sep. 30, 2019 | $ 605 | $ 9 | 62,876 | (1,425) | (56,594) | (24) | 1,022 | 2,198 | |
Balance at ending (in shares) at Sep. 30, 2019 | 848 | 94,609 | |||||||
Balance at beginning at Mar. 31, 2019 | $ 605 | $ 2 | 62,606 | (1,425) | (55,510) | (24) | 1,088 | 6,737 | |
Balance at beginning (in shares) at Mar. 31, 2019 | 34 | 3,502 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (1,084) | (66) | (1,150) | ||||||
Shares issuance for contract modification | 127 | 127 | |||||||
Shares issuance for contract modification (in Share) | 82 | ||||||||
Shares issued for services to be provided | 150 | 150 | |||||||
Shares issued for services to be provided (in Shares) | 200 | ||||||||
Balance at ending at Jun. 30, 2019 | $ 605 | $ 2 | 62,883 | (1,425) | (56,594) | (24) | 1,022 | 5,864 | |
Balance at ending (in shares) at Jun. 30, 2019 | 34 | 3,784 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (3,902) | (20) | (3,922) | ||||||
Shares cancelled | (1,275) | 1,275 | |||||||
Shares cancelled, shares | (340) | ||||||||
Shares subscription settled through services supplied | 150 | 150 | |||||||
Shares issued for loan commitment fees | 67 | 67 | |||||||
Shares issued for loan commitment fees, shares | 174 | ||||||||
Shares issued for services to be provided | 39 | 39 | |||||||
Shares issued for services to be provided (in Shares) | 100 | ||||||||
Shares issued as security for loan | |||||||||
Shares issued as security for loan, shares | 179 | ||||||||
Balance at ending at Sep. 30, 2019 | $ 605 | $ 9 | $ 62,876 | $ (1,425) | $ (56,594) | $ (24) | $ 1,022 | $ 2,198 | |
Balance at ending (in shares) at Sep. 30, 2019 | 848 | 94,609 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net loss for the period, continuing operations | $ (2,432) | $ (6,675) |
Adjustment to reconcile net loss for the period to net cash flows from operating activities: | ||
Depreciation of property and equipment | 1 | 1 |
Amortization of intangible assets | 415 | 338 |
Gain on sale of interest in subsidiary | (553) | |
Amortization of beneficial conversion feature | 355 | |
Shares issued for services | 256 | 3,392 |
Shares issued for contract modification | 127 | |
Amortization of shares issued for services | 689 | 872 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (97) | 15 |
Other assets | (68) | (114) |
Accounts payable and accrued expenses | 339 | (112) |
Net cash flows from continuing operating activities | (1,323) | (1,928) |
Net cash flows from discontinued operating activities | (578) | (445) |
Net cash flows from total operating activities | (1,901) | (2,373) |
Cash used in investing activities: | ||
Cash advances to former acquisition target | (140) | |
Proceeds from sale of interest in subsidiary | 1,500 | |
Cash consideration on acquisitions (net of cash acquired) | (108) | |
Acquisition of fixed assets | (1) | |
Net cash flows from continuing investing activities | 1,360 | (109) |
Net cash flows from discontinued investing activities | (77) | (5) |
Net cash flows from total investing activities | 1,283 | (114) |
Cash flows from financing activities: | ||
Proceeds from issuance of shares | 824 | |
Proceeds from exercise of warrants | 1,246 | |
Proceeds from issuance of convertible notes | 200 | |
Proceeds from loans payable | 723 | |
Repayment of advances to related parties | (2) | (81) |
Net cash flows from financing activities from continuing operations | 721 | 2,189 |
Net cash flows from financing activities from discontinued operations | 71 | 34 |
Net Cash Provided by used in Financing Activities | 792 | 2,223 |
Increase (decrease) in cash during the period | 174 | (264) |
Foreign exchange effect on cash | 12 | 36 |
Cash at beginning of the period | 313 | 763 |
Cash at end of the period (Continuing and Discontinued Operations) | 497 | 535 |
Non-cash financing transactions: | ||
Common stock issued for business combinations | 14,220 | |
Common stock issued for conversion of debt | $ 406 |
Description of Business, Organi
Description of Business, Organization and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business, Organization and Principles of Consolidation | Note 1. Description of Business, Organization and Principles of Consolidation Description of Business On September 26, 2019 the Company changed its name from One Horizon Group, Inc. to Touchpoint Group Holdings, Inc (the "Company"). The Company has the following businesses: (i) Touchpoint Connect Limited ("Touchpoint") – a newly formed wholly owned subsidiary that offers a white label product which is a fan engagement platform designed to enhance the fan experience and drive commercial aspects of the sport and entertainment business. (ii) The Company is in negotiations to sell their interests in Love Media House, Inc. ("Love Media House") and Browning Productions and Entertainment, Inc. ("Browning Productions") and as such they are considered to be discontinued operations. See note 3 for more information. (iii) 123 Wish, Inc. should be considered dormant. All operations have been moved to Touchpoint. As of September 30, 2019, the Company was in the process of negotiating a licensing deal with Maham, LLC ("Maham") to make the Touchpoint software platform available to Maham on a revenue-sharing basis. The advances totaling $210,000 as of September 30, 2019, made by the Company to Maham is expected to be repaid from the revenue generated by the platform. Once the advances have been repaid the revenue sharing percentages will return to the usual contractual amounts. In February 2019, the Company entered into an Exchange Agreement pursuant to which the Company agreed to acquire 51% of the issued and outstanding interests in Maham. As of September 30, 2019, the Maham transaction had not yet closed. The Company is based in the United States of America, Hong Kong, China and the United Kingdom. Interim Period Financial Statements The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP") for interim financial information and with the Securities and Exchange Commission (the "SEC") instructions. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The results of operations reflect interim adjustments, all of which are of a normal recurring nature and, in the opinion of management, are necessary for a fair presentation of the results for such interim period. The results reported in these interim condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. Certain information and note disclosure normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the SEC's rules and regulations. These unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC on April 15, 2019. Current Structure of the Company The Company has the following subsidiaries: Subsidiary name % Owned ● 123Wish, Inc. (considered dormant) 51 % ● One Horizon Hong Kong Ltd 100 % ● Horizon Network Technology Co. Ltd 100 % ● Love Media House (discontinued operations) 100 % ● Touchpoint (newly formed in September 2019) 100 % ● Browning Productions (discontinued operations) 51 % In addition to the subsidiaries listed above, Suzhou Aishuo Network Information Co., Ltd ("Suzhou Aishuo") is a limited liability company, organized in China and controlled by the Company via various contractual arrangements. Suzhou Aishuo is treated as one of our subsidiaries for financial reporting purposes in accordance with GAAP. All significant intercompany balances and transactions have been eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Liquidity and Capital Resources Historically, the Company has incurred net losses and negative cash flows from operations which raise substantial doubt about the Company's ability to continue as a going concern. The Company has principally financed these losses from the sale of equity securities and the issuance of debt instruments. The Company may be required to raise additional funds through various sources, such as equity and debt financings. While the Company believes it is probable that such financings could be secured, there can be no assurance the Company will be able to secure additional sources of funds to support its operations or, if such funds are available, that such additional financing will be sufficient to meet the Company's needs or on terms acceptable to us. At September 30, 2019, the Company had cash of approximately $497,000. Together with the Company's current operational plan and budget, the Company believes that it is probable that it will have sufficient cash to fund its operations into at least the first quarter of 2021. However, actual results could differ materially from the Company's projections. On August 5, 2019 the Company entered into an Equity Purchase agreement with Crown Bridge Partners, LLC ("Crown"), whereby Crown are committed to purchase up to $10.0 million of new common stock from the Company at the Company's option during the next three years. The amount is determined by the market value of trades and priced at an 18% discount to average market price. As of September 30, 2019, no shares have been sold under the Crown Equity Purchase plan. In coordination with the Equity Purchase Agreement the Company entered into a six month loan with Labrys Fund, LP of $180,000 issued at a 10% original issue discount, the Company therefore received net proceeds of $162,000 and an annual coupon rate of 12%. Foreign Currency Translation The reporting currency of the Company is the United States dollar. Assets and liabilities other than those denominated in U.S. dollars, primarily in Singapore, the United Kingdom and China, are translated into United States dollars at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the average rate of exchange throughout the period. Gains or losses from these translations are reported as a separate component of other comprehensive income (loss) until all or a part of the investment in the subsidiaries is sold or liquidated. The translation adjustments do not recognize the effect of income tax because the Company expects to reinvest the amounts indefinitely in operations. Transaction gains and losses that arise from exchange-rate fluctuations on transactions denominated in a currency other than the functional currency are included in general and administrative expenses. Accounts Receivable, Revenue Recognition and Concentrations Performance Obligations Revenue Recognition — Discontinued operations 1 Love Media House derives income from recording and video services. Income is recognized when the recording and video services are performed and the final customer product is delivered and the point at which the performance obligation is satisfied. These revenues are non-refundable. 2 Browning Productions derives income from the advertising associated with the airing of television series produced by Browning Productions and also license income from the show of series on certain channels based on the number of viewers attracted. Advertising revenue is recognized when the series to which the advertising relates is aired. — Continued operations 3 Touchpoint – Revenue for the sale of the software license is recognized when the customer has use of the services and has access to use the software. Revenue from maintenance services are recognized as the services are provided and charged. The Company does not have off-balance sheet credit exposure related to its customers. As of September 30, 2019, two customers accounted for 100% of the accounts receivable balance and as of December 31, 2018, there was no accounts receivable balance. Three customers accounted for 100% of the revenue for the nine months ended September 30, 2019 and one customer accounted for 74% of the revenue for the nine months ended September 30, 2018. Income Taxes The Company continually evaluates its uncertain income tax positions and may record a liability for any unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense and other expense, respectively. Because tax laws are complex and subject to different interpretations, significant judgment is required. As a result, the Company makes certain estimates and assumptions in: (1) calculating its income tax expense, deferred tax assets, and deferred tax liabilities; (2) determining any valuation allowance recorded against deferred tax assets; and (3) evaluating the amount of unrecognized tax benefits, as well as the interest and penalties related to such uncertain tax positions. The Company's estimates and assumptions may differ significantly from tax benefits ultimately realized. Historically the Company has not filed income tax returns and the related required informational filings in the US. Certain informational filings if not filed contain penalties and such penalties could be material. The Company is currently addressing this issue with advisors to determine the amount, if any, of potential payments due. Given the complexity of the issue the Company is unable to quantify a range of potential loss, if any. Accordingly no liability has been recorded in the accompanying consolidated balance sheets in respect of this matter. Net Loss per Share Basic net loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under basic loss per share) and potentially dilutive securities. For the three and nine month periods ended September 30, 2019 and 2018, outstanding warrants are antidilutive because of net losses, and as such, their effect has not been included in the calculation of diluted net loss per share. Common shares issuable are considered outstanding as of the original approval date for purposes of earnings per share computations. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the fiscal period. The Company makes estimates for, among other items, useful lives for depreciation and amortization, determination of future cash flows associated with impairment testing for long-lived assets, determination of the fair value of stock options and warrants, determining fair values of assets acquired and liabilities assumed in business combinations, valuation allowance for deferred tax assets, allowances for doubtful accounts, and potential income tax assessments and other contingencies. The Company bases its estimates on historical experience, current conditions, and other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates and assumptions. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases," which created a new Topic, ASC Topic 842 and established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments, that arise from leases. For leases with a term of 12 months or less, a lessee is permitted to make an election under which such assets and liabilities would not be recognized, and lease expense would be recognized generally on a straight-line basis over the lease term. This standard is effective for the Company beginning in 2019 and was adopted by the Company for the year beginning January 1, 2019. The Company has evaluated the impact of this revised guidance on its financial statements and determined it had no material impact, as the Company has no leasing arrangements with terms greater than one year. Share-Based Compensation The Company accounts for stock-based awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes option pricing model, which includes subjective judgements about the expected life of the awards, forfeiture rates and stock price volatility. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations | Note 3. Discontinued operations In November 2018, the management of the Company's then 51% controlled subsidiary, Banana Whale Studios PTE Ltd. ("BWS"), entered into discussions whereby the Company would sell its shares of BWS to a third party. Under the agreement, which has an effective date of January 1, 2019, the Company received cash of $1,500,000 and a promissory note of $500,000 and the return of the 7,383,000 Company shares (pre-reverse split) issued on acquisition. The Company realized a gain of $553,000 on the sale of its 51% interest in BWS during the nine months ended September 30, 2019. During the nine months ended Sep te The Company has accounted for the operations of BWS, Love Media House and Browning Productions as discontinued operations. The statement of operations for three and nine months ended September 30, 2019 for discontinued operations is as follows: (in thousands) Three Months Ended Nine Months Ended 2019 2018 2019 2018 Revenue $ 57 $ 344 $ 464 $ 807 Cost of revenue Hardware 25 208 192 318 Amortization 50 938 150 1,938 75 1,146 342 2,256 Gross Profit (18 ) (802 ) 122 (1,449 ) Expenses General and administrative 305 406 986 589 Depreciation 3 3 8 4 Other expenses 11 - 18 - Impairment 2,440 - 2,440 - 2,759 409 3,452 593 Loss from Discontinued Operations $ (2,777 ) $ (1,211 ) $ (3,330 ) $ (2,042 ) The balance sheet of discontinued operations as of September 30, 2019 and December 31, 2018 is as follows: (in thousands) September 30, December 31, 2019 2018 Current assets Cash $ 2 $ 58 Accounts Receivable - 436 Other current assets 27 92 29 586 Property and equipment 34 39 Intangible assets - 830 Goodwill - 1,659 $ 63 $ 3,114 Current Liabilities Accounts payable and accrued expenses $ 36 $ 59 Deferred revenue 15 177 Loans payable 115 401 Finance contracts, due within one year 24 - Notes payable – related parties 214 205 404 842 Non-current liabilities Finance contracts 27 - $ 431 $ 842 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4. Intangible Assets Intangible assets consist of the following (in thousands): September 30, December 31, 2019 2018 Touchpoint software $ 2,928 $ 2,894 Goodwill 419 419 3,347 3,313 Less accumulated amortization (820 ) (405 ) Intangible assets, net $ 2,527 $ 2,908 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 4. Notes Payable a) Promissory notes, related parties The promissory notes due to Zhanming Wu ($500,000) and the Company's CEO, Mark White ($500,000), both considered related parties, including accrued interest of 7% per annum from issuance, were due for repayment on August 31, 2019 such payments were not made and the parties are negotiating new terms. b) Century River Limited The loan payable in the amount of $443,000 is due to Century River Limited, a company controlled by the Company's CEO, Mark White. This loan is due on demand and bears interest of 3% per annum. c) Bespoke Growth Partners The loan payable in the amount of $100,000 is due to Bespoke Growth Partners. This loan is due on January 26, 2020 and bears interest of 20% per annum. d) Labrys Fund The loan payable in the amount of $180,000 is due to Labrys Fund LP. This loan is due on January 24, 2020 and bears interest of 12% per annum. |
Share Capital
Share Capital | 9 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Share Capital | Note 5. Share Capital Common Stock The Company is authorized to issue 200 million shares of common stock, par value of $0.0001. During the nine months ended September 30, 2019, the Company issued shares of common stock as follows: ● 81,933 shares of common stock, with a fair value of $126,760, as additional compensation related to acquisition of Browning Productions. ● 200,000 shares of common stock, with a fair value of $150,000, for consulting services to be provided. ● 100,000 shares of common stock with a fair value of $38,750 for consulting services to be provided ● 179,104 shares of common stock as security against loan payable to Labrys Fund LP ● 174,000 shares of common stock for a commitment fee payable to Crownbridge Partners During the nine months ended September 30, 2019 340,000 shares of common stock, issued in December 2018 was returned to the company for cancellation and the related share subscription due was cancelled. Stock Purchase Warrants As at September 30, 2019, the Company had reserved 2,890 shares of its common stock for the outstanding warrants with weighted average exercise price of $20.00. Such warrants expire at various times through July 2020. During the nine months ended September 30, 2019, no warrants were issued or exercised and 4,518 warrants were forfeited. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 6. Stock-Based Compensation The shareholders approved a stock option plan on August 6, 2013, the 2013 Equity Incentive Plan ("2013 Plan"). The 2013 Plan is for the issuance of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, dividend equivalents, cash bonuses and other stock-based awards to employees, directors and consultants of the Company. There have been no options issued in the nine months ended September 30, 2019 and 2018 and there are no options outstanding as at September 30, 2019. In March 2018 the Company adopted an Equity Incentive Plan ("the 2018 Plan") to provide additional incentives to the employees, directors and consultants of the Company to promote the success of the Company's business. During the nine months ended September 30, 2019, no common stock of the Company was issued under the 2018 Plan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources Historically, the Company has incurred net losses and negative cash flows from operations which raise substantial doubt about the Company's ability to continue as a going concern. The Company has principally financed these losses from the sale of equity securities and the issuance of debt instruments. The Company may be required to raise additional funds through various sources, such as equity and debt financings. While the Company believes it is probable that such financings could be secured, there can be no assurance the Company will be able to secure additional sources of funds to support its operations or, if such funds are available, that such additional financing will be sufficient to meet the Company's needs or on terms acceptable to us. At September 30, 2019, the Company had cash of approximately $497,000. Together with the Company's current operational plan and budget, the Company believes that it is probable that it will have sufficient cash to fund its operations into at least the first quarter of 2021. However, actual results could differ materially from the Company's projections. On August 5, 2019 the Company entered into an Equity Purchase agreement with Crown Bridge Partners, LLC ("Crown"), whereby Crown are committed to purchase up to $10.0 million of new common stock from the Company at the Company's option during the next three years. The amount is determined by the market value of trades and priced at an 18% discount to average market price. As of September 30, 2019, no shares have been sold under the Crown Equity Purchase plan. In coordination with the Equity Purchase Agreement the Company entered into a six month loan with Labrys Fund, LP of $180,000 issued at a 10% original issue discount, the Company therefore received net proceeds of $162,000 and an annual coupon rate of 12%. |
Foreign Currency Translation | Foreign Currency Translation The reporting currency of the Company is the United States dollar. Assets and liabilities other than those denominated in U.S. dollars, primarily in Singapore, the United Kingdom and China, are translated into United States dollars at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the average rate of exchange throughout the period. Gains or losses from these translations are reported as a separate component of other comprehensive income (loss) until all or a part of the investment in the subsidiaries is sold or liquidated. The translation adjustments do not recognize the effect of income tax because the Company expects to reinvest the amounts indefinitely in operations. Transaction gains and losses that arise from exchange-rate fluctuations on transactions denominated in a currency other than the functional currency are included in general and administrative expenses. |
Accounts Receivable, Revenue Recognition and Concentrations | Accounts Receivable, Revenue Recognition and Concentrations Performance Obligations Revenue Recognition — Discontinued operations 1 Love Media House derives income from recording and video services. Income is recognized when the recording and video services are performed and the final customer product is delivered and the point at which the performance obligation is satisfied. These revenues are non-refundable. 2 Browning Productions derives income from the advertising associated with the airing of television series produced by Browning Productions and also license income from the show of series on certain channels based on the number of viewers attracted. Advertising revenue is recognized when the series to which the advertising relates is aired. — Continued operations 3 Touchpoint – Revenue for the sale of the software license is recognized when the customer has use of the services and has access to use the software. Revenue from maintenance services are recognized as the services are provided and charged. The Company does not have off-balance sheet credit exposure related to its customers. As of September 30, 2019, two customers accounted for 100% of the accounts receivable balance and as of December 31, 2018, there was no accounts receivable balance. Three customers accounted for 100% of the revenue for the nine months ended September 30, 2019 and one customer accounted for 74% of the revenue for the nine months ended September 30, 2018. |
Income Taxes | Income Taxes The Company continually evaluates its uncertain income tax positions and may record a liability for any unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties are recorded as a component of interest expense and other expense, respectively. Because tax laws are complex and subject to different interpretations, significant judgment is required. As a result, the Company makes certain estimates and assumptions in: (1) calculating its income tax expense, deferred tax assets, and deferred tax liabilities; (2) determining any valuation allowance recorded against deferred tax assets; and (3) evaluating the amount of unrecognized tax benefits, as well as the interest and penalties related to such uncertain tax positions. The Company's estimates and assumptions may differ significantly from tax benefits ultimately realized. Historically the Company has not filed income tax returns and the related required informational filings in the US. Certain informational filings if not filed contain penalties and such penalties could be material. The Company is currently addressing this issue with advisors to determine the amount, if any, of potential payments due. Given the complexity of the issue the Company is unable to quantify a range of potential loss, if any. Accordingly no liability has been recorded in the accompanying consolidated balance sheets in respect of this matter. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the net loss attributable to common shareholders by the weighted average number of common shares outstanding in the period. Diluted loss per share takes into consideration common shares outstanding (computed under basic loss per share) and potentially dilutive securities. For the three and nine month periods ended September 30, 2019 and 2018, outstanding warrants are antidilutive because of net losses, and as such, their effect has not been included in the calculation of diluted net loss per share. Common shares issuable are considered outstanding as of the original approval date for purposes of earnings per share computations. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the fiscal period. The Company makes estimates for, among other items, useful lives for depreciation and amortization, determination of future cash flows associated with impairment testing for long-lived assets, determination of the fair value of stock options and warrants, determining fair values of assets acquired and liabilities assumed in business combinations, valuation allowance for deferred tax assets, allowances for doubtful accounts, and potential income tax assessments and other contingencies. The Company bases its estimates on historical experience, current conditions, and other assumptions that it believes to be reasonable under the circumstances. Actual results could differ from those estimates and assumptions. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, "Leases," which created a new Topic, ASC Topic 842 and established the core principle that a lessee should recognize the assets, representing rights-of-use, and liabilities to make lease payments, that arise from leases. For leases with a term of 12 months or less, a lessee is permitted to make an election under which such assets and liabilities would not be recognized, and lease expense would be recognized generally on a straight-line basis over the lease term. This standard is effective for the Company beginning in 2019 and was adopted by the Company for the year beginning January 1, 2019. The Company has evaluated the impact of this revised guidance on its financial statements and determined it had no material impact, as the Company has no leasing arrangements with terms greater than one year. |
Share-Based Compensation | Share-Based Compensation The Company accounts for stock-based awards at fair value on date of grant and recognition of compensation over the service period for awards expected to vest. The fair value of stock options is determined using the Black-Scholes option pricing model, which includes subjective judgements about the expected life of the awards, forfeiture rates and stock price volatility. |
Discontinued Operations (Tables
Discontinued Operations (Tables) (USD $) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations Tables | |
Schedule of financial statements including discontinued operations | Three Months Ended Nine Months Ended 2019 2018 2019 2018 Revenue $ 57 $ 344 $ 464 $ 807 Cost of revenue Hardware 25 208 192 318 Amortization 50 938 150 1,938 75 1,146 342 2,256 Gross Profit (18 ) (802 ) 122 (1,449 ) Expenses General and administrative 305 406 986 589 Depreciation 3 3 8 4 Other expenses 11 - 18 - Impairment 2,440 - 2,440 - 2,759 409 3,452 593 Loss from Discontinued Operations $ (2,777 ) $ (1,211 ) $ (3,330 ) $ (2,042 ) September 30 December 31 2019 2018 Current assets Cash $ 2 $ 58 Accounts Receivable - 436 Other current assets 27 92 29 586 Property and equipment 34 39 Intangible assets - 830 Goodwill - 1,659 $ 63 $ 3,114 Current Liabilities Accounts payable and accrued expenses $ 36 $ 59 Deferred revenue 15 177 Loans payable 115 401 Finance contracts, due within one year 24 - Notes payable – related parties 214 205 404 842 Non-current liabilities Finance contracts 27 - $ 431 $ 842 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | September 30, December 31, 2019 2018 Touchpoint software $ 2,928 $ 2,894 Goodwill 419 419 3,347 3,313 Less accumulated amortization (820 ) (405 ) Intangible assets, net $ 2,527 $ 2,908 |
Description of Business, Orga_2
Description of Business, Organization and Principles of Consolidation (Details) | Sep. 30, 2019USD ($) |
Advances | $ 210,000 |
123Wish, Inc. (considered dormant) | |
% Owned | 51.00% |
One Horizon Hong Kong Ltd [Member] | |
% Owned | 100.00% |
Horizon Network Technology Co. Ltd [Member] | |
% Owned | 100.00% |
Love Media House (discontinued operations) [Member] | |
% Owned | 100.00% |
Touchpoint (newly formed in September 2019) [Member] | |
% Owned | 100.00% |
Browning Productions (discontinued operations) [Member] | |
% Owned | 51.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||
Aug. 05, 2019 | Sep. 30, 2019USD ($)Number | Sep. 30, 2018USD ($)Number | Dec. 31, 2018USD ($)Number | Dec. 31, 2017USD ($) | |
Summary of significant accounting policies (Textual) | |||||
Cash | $ | $ 497 | $ 535 | $ 313 | $ 763 | |
Customer Concentration Risk [Member] | Revenue [Member] | |||||
Summary of significant accounting policies (Textual) | |||||
Number of customers | 3 | 1 | |||
Percentage of concentration risk | 100.00% | 74.00% | |||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | |||||
Summary of significant accounting policies (Textual) | |||||
Number of customers | 2 | ||||
Percentage of concentration risk | 100.00% | ||||
Equity Purchase Agreement [Member] | Crown Bridge Partners, LLC [Member] | |||||
Summary of significant accounting policies (Textual) | |||||
Description of committed to purchase | The Company entered into an Equity Purchase agreement with Crown Bridge Partners, LLC ("Crown"), whereby Crown are committed to purchase up to $10.0 million of new common stock from the Company at the Company's option during the next three years. The amount is determined by the market value of trades and priced at an 18% discount to average market price. As of September 30, 2019, no shares have been sold under the Crown Equity Purchase plan. In coordination with the Equity Purchase Agreement the Company entered into a six month loan with Labrys Fund, LP of $180,000 issued at a 10% original issue discount, the Company therefore received net proceeds of $162,000 and an annual coupon rate of 12%. |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Discontinued Operations | ||||
Revenue | $ 57 | $ 344 | $ 464 | $ 807 |
Cost of revenue | ||||
Hardware | 25 | 208 | 192 | 318 |
Amortization | 50 | 938 | 150 | 1,938 |
Total cost of revenue | 75 | 1,146 | 342 | 2,256 |
Gross Profit | (18) | (802) | 122 | (1,449) |
Expenses | ||||
General and administrative | 305 | 406 | 986 | 589 |
Depreciation | 3 | 3 | 8 | 4 |
Other expenses | 11 | 18 | ||
Impairment | 2,440 | 2,440 | ||
Total expenses | 2,759 | 409 | 3,452 | 593 |
Loss from Discontinued Operations | $ (2,777) | $ (1,211) | $ (3,330) | $ (2,042) |
Discontinued Operations (Deta_2
Discontinued Operations (Details 1) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash | $ 2 | $ 58 |
Accounts Receivable | 436 | |
Other current assets | 27 | 92 |
Total current assets of discontinued operations | 29 | 586 |
Property and equipment | 34 | 39 |
Intangible assets | 830 | |
Goodwill | 1,659 | |
Total current assets of discontinued operations | 63 | 3,114 |
Current Liabilities | ||
Accounts payable and accrued expenses | 36 | 59 |
Deferred revenue | 15 | 177 |
Loans payable | 115 | 401 |
Finance contracts, due within one year | 24 | |
Notes payable - related parties | 214 | 205 |
Total current liabilities disposal | 404 | 842 |
Non-current liabilities | ||
Finance contracts | 27 | |
Total non current disposal of liabilities | $ 27 |
Discontinued Operations (Deta_3
Discontinued Operations (Details Textual) - USD ($) $ in Thousands | Feb. 04, 2019 | Jan. 02, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Nov. 30, 2018 |
Discontinued operations (Textual) | |||||
Cash | $ 108 | ||||
Impairment charge | $ 2,440,000 | ||||
Banana Whale Studios PTE Ltd. [Member] | |||||
Discontinued operations (Textual) | |||||
Number of shares issued upon acquisition | 7,383,000 | ||||
Cash | $ 1,500 | ||||
Promissory notes payable | $ 500 | ||||
Banana Whale Studios PTE Ltd. [Member] | Discontinued Operations [Member] | |||||
Discontinued operations (Textual) | |||||
Ownership percentage acquired | 51.00% | 51.00% | |||
Gain on disposition of business | $ 553 | ||||
Browning Productions and Entertainment, Inc. [Member] | |||||
Discontinued operations (Textual) | |||||
Ownership percentage acquired | 51.00% | ||||
Love Media House, Inc. (formerly C-Rod, Inc.) [Member] | |||||
Discontinued operations (Textual) | |||||
Ownership percentage acquired | 100.00% |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Intangible Assets (Textual) | ||
Intangible assets, gross | $ 3,347 | $ 3,313 |
Less accumulated amortization | (820) | (405) |
Intangible assets, net | 2,527 | 2,908 |
Touchpoint software [Member] | ||
Intangible Assets (Textual) | ||
Intangible assets, gross | 2,928 | 2,894 |
Goodwill [Member] | ||
Intangible Assets (Textual) | ||
Intangible assets, gross | $ 419 | $ 419 |
Notes Payable (Details)
Notes Payable (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
7% Convertible Notes Payable Due August 31, 2019 [Member] | |
Debt interest percentage | 7.00% |
Labrys Fund [Member] | |
Loan payable | $ 180 |
Debt interest percentage | 12.00% |
Maturity date | Jan. 24, 2020 |
Zhanming Wu [Member] | 7% Convertible Notes Payable Due August 31, 2019 [Member] | |
Debt principal amount | $ 500 |
Mark White [Member] | |
Loan payable | $ 443 |
Debt interest percentage | 3.00% |
Mark White [Member] | 7% Convertible Notes Payable Due August 31, 2019 [Member] | |
Debt principal amount | $ 500 |
Bespoke Growth Partners [Member] | Loan Payable [Member] | |
Debt principal amount | $ 100 |
Debt interest percentage | 20.00% |
Maturity date | Jan. 26, 2020 |
Share Capital (Details)
Share Capital (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2018 | Sep. 30, 2019 | Dec. 31, 2018 | |
Share Capital (Textual) | |||
Common stock, authorized | 200,000,000 | 200,000,000 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Fair value amount | $ 350 | ||
Crownbridge Partners [Member] | |||
Share Capital (Textual) | |||
Common stock shares | 174,000 | ||
Browning Production & Entertainment [Member] | |||
Share Capital (Textual) | |||
Common stock shares | 81,933 | ||
Fair value amount | $ 126,760 | ||
Labrys Fund LP [Member] | |||
Share Capital (Textual) | |||
Common stock shares | 179,104 | ||
Consulting Services [Member] | |||
Share Capital (Textual) | |||
Common stock shares | 200,000 | ||
Fair value amount | $ 150,000 | ||
Consulting Services One [Member] | |||
Share Capital (Textual) | |||
Common stock shares | 100,000 | ||
Fair value amount | $ 38,750 | ||
Warrant [Member] | |||
Share Capital (Textual) | |||
Number of stock reserved for issuance of warrant | 2,890 | ||
Maturity term | 2020-07 | ||
Exercise price (in dollars per share) | $ 20 | ||
Common stock shares | 340,000 | ||
Warrant forfeited | 4,518 |