Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | One Horizon Group, Inc. | |
Entity Central Index Key | 225,211 | |
Document Type | 10-Q | |
Trading Symbol | OHGI | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,082,743 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 170 | $ 106 |
Accounts receivable, net | 2 | |
Prepaid compensation, current | 607 | 131 |
Current assets of continued operations | 777 | 239 |
Current assets of discontinued operations | 1,696 | |
Total current assets | 777 | 1,935 |
Property and equipment, net | 1 | 16 |
Intangible assets, net | 5,745 | 6,190 |
Prepaid compensation, non current | 2,155 | |
Non current assets of discontinued operations | 2,265 | |
Total assets | 8,678 | 10,406 |
Current liabilities: | ||
Accounts payable | 98 | 177 |
Accrued expenses | 590 | 188 |
Accrued compensation | 70 | 151 |
Convertible debenture | 3,493 | 3,068 |
Current liabilities of discontinued operations | 4,251 | 3,584 |
Current liabilities of discontinued operations | 300 | |
Total current liabilities | 4,251 | 3,884 |
Long-term liabilities | ||
Amount due to related parties | 2,343 | |
Long term liabilities of discontinued corporation | 234 | |
Total liabilities | 4,251 | 6,461 |
Equity | ||
Preferred stock:$0.0001 par value, authorized 50,000,000; issued and outstanding 555,555 shares (December 2016 - 170,940) | 1 | 1 |
Common stock: $0.0001 par value, authorized 33,333,333 shares issued and outstanding ,9135,181 shares (December 2016 - 6,144,762) | 1 | 1 |
Additional paid-in capital | 41,863 | 37,504 |
Accumulated Deficit | (37,416) | (33,590) |
Accumulated other comprehensive income | (22) | 29 |
Total One Horizon Group, Inc., stockholders' equity | 4,427 | 3,945 |
Total liabilities and equity | $ 8,678 | $ 10,406 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized | 50,000,000 | 50,000,000 |
Preferred stock issued | 555,555 | 170,940 |
Preferred stock outstanding | 555,555 | 170,940 |
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized | 33,333,333 | 33,333,333 |
Common stock issued | 9,135,181 | 6,144,762 |
Common stock outstanding | 9,135,181 | 6,144,762 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenue | $ 397 | $ 1 | $ 514 | $ 32 |
Cost of revenue - Hardware, calls and network charges | 1 | 7 | 1 | 32 |
Cost of revenue - Amortization of software development costs | 405 | 22 | 449 | 68 |
Total cost of revenue | 406 | 29 | 450 | 100 |
Gross margin | (9) | (28) | 64 | (68) |
Expenses: | ||||
General and administrative | 338 | 482 | 911 | 1,470 |
Depreciation | 2 | 7 | 16 | 21 |
Total expenses | 340 | 489 | 927 | 1,491 |
Loss from operations | (349) | (517) | (863) | (1,559) |
Other income and expense: | ||||
Interest expense | (179) | (178) | (536) | (533) |
Foreign exchange | 1 | 1 | 2 | |
Total other income and expense | (179) | (177) | (535) | (531) |
Loss before income taxes for continuing operations | (528) | (694) | (1,398) | (2,090) |
Income tax benefit | ||||
Loss after income taxes for continuing operations | (528) | (694) | (1,398) | (2,090) |
Loss from discontinued operations | (244) | (799) | (2,428) | (2,079) |
Net Loss | (772) | (1,493) | (3,826) | (4,169) |
Less: Preferred Dividends | (50) | |||
Net loss attributable to One Horizon Group Inc. common stockholders | $ (772) | $ (1,493) | $ (3,826) | $ (4,219) |
Earnings per share | ||||
Basic and diluted net loss per share - continuing operations (in dollars per share) | $ (0.07) | $ (0.12) | $ (0.21) | $ (0.36) |
Basic and diluted net loss per share - discontinued operations (in dollars per share) | $ (0.03) | $ (0.08) | $ (0.36) | $ (0.35) |
Weighted average number of shares outstanding | ||||
Basic and diluted (in shares) | 7,541 | 5,864 | 6,680 | 5,861 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
Net loss | $ (772) | $ (1,493) | $ (3,826) | $ (4,169) |
Other comprehensive (loss): | ||||
Foreign currency translation adjustment income/(loss) | (221) | 320 | (51) | 146 |
Total Comprehensive loss | $ (993) | $ (1,173) | $ (3,877) | $ (4,023) |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Equity (unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Balance at beginning at Dec. 31, 2016 | $ 1 | $ 1 | $ 37,504 | $ (33,590) | $ 29 | $ 3,945 |
Balance at beginning (in shares) at Dec. 31, 2016 | 171 | 6,145 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income (loss) | (3,826) | (1,398) | ||||
Foreign currency translations | (51) | (51) | ||||
Shares issued for services | 176 | $ 176 | ||||
Shares issued for services (in shares) | 92 | 91,667 | ||||
Shares issued for cash | 265 | $ 265 | ||||
Shares issued for cash (in shares) | 417 | 417,461 | ||||
Shares issued on exercise of warrants | 146 | $ 146 | ||||
Shares issued on exercise of warrants (in shares) | 183 | |||||
Shares issued in settlement of related party debts | 662 | $ 662 | ||||
Shares issued in settlement of related party debts (in shares) | 860 | 859,802 | ||||
Warrants issued for services | 123 | $ 123 | ||||
Shares issued for amounts owing | 30 | 30 | ||||
Shares issued for amounts owing (in shares) | 37 | |||||
Amendment to preferred stock agreement | ||||||
Amendment to preferred stock agreement (in shares) | 385 | |||||
Shares issued for services | 145 | 145 | ||||
Shares issued for services (in shares) | 3,000 | |||||
Reclassification of mandatorily redeemable preferred shares | 62 | 62 | ||||
Balance at ending at Sep. 30, 2017 | $ 1 | $ 1 | $ 41,863 | $ (37,416) | $ (22) | $ 4,427 |
Balance at ending (in shares) at Sep. 30, 2017 | 556 | 10,734 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss for the period | $ (1,398,000) | $ (2,090,000) |
Adjustment to reconcile net loss for the period to net cash flows from operating activities: | ||
Depreciation of property and equipment | 18,000 | 21,000 |
Amortization of intangible assets | 449,000 | 68,000 |
Amortization of debt issue costs | 99,000 | 99,000 |
Amortization of beneficial conversion feature | 76,000 | 75,000 |
Amortization of debt discount | 150,000 | 150,000 |
Amortization of shares issued for signing management contracts | 46,000 | |
Warrants issued for services | 123,000 | |
Amortization of shares issued for services | 46,000 | |
Options issued for services | 145,000 | 563,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,000 | |
Other assets | 12,000 | 49,000 |
Accounts payable and accrued expenses | 242,000 | 71,000 |
Net cash flows from continuing operating activities | 10,000 | (994,000) |
Net cash flows from discontinued operating activities | (374,000) | (99,000) |
Net cash flows from total operating activities | (364,000) | (1,093,000) |
Cash used in investing activities: | ||
Acquisition of property and equipment | (1,000) | (2,000) |
Net cash flows from investing activities continuing operations | (1,000) | (2,000) |
Net cash flows from investing activities discontinued operations | (261,000) | (339,000) |
Net cash flows from investing activities total operations | (262,000) | (341,000) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock | 265,000 | 125,000 |
Proceeds from exercise of warrants | 146,000 | |
Advances from (repayments to) related parties, net | 100,000 | (11,000) |
Dividends paid | (50,000) | |
Net cash flows from financing activities continuing operations | 511,000 | 64,000 |
Net cash flows from financing activities discontinued operations | (5,000) | |
Net cash flows from financing activities total operations | 511,000 | 59,000 |
Decrease in cash during the period | (115,000) | (1,375,000) |
Foreign exchange effect on cash | 26,000 | (93,000) |
Cash at beginning of the period - discontinued operations | 153,000 | 160,000 |
Cash at beginning of the period - continuing operations | 106,000 | 1,612,000 |
Cash at end of the period | 170,000 | 304,000 |
Supplementary Information: | ||
Interest paid | 69,000 | |
Income taxes paid | ||
Reclassification of mandatorily redeemable preferred shares | 62,000 | |
Forgiveness of related party dept for stock | 662,000 | |
Forgiveness of related party dept for sale of discontinued assets | $ 1,968,000 |
Description of Business, Organi
Description of Business, Organization and Principles of Consolidation | 9 Months Ended |
Sep. 30, 2017 | |
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 One Horizon Group, Inc (“the Company”) has proprietary digitally secure messaging software and sells licenses primarily into the gaming, security and educational markets. The Company is based in 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’ 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 Securities and Exchange Commission’s rules and regulations. These unaudited interim condensed 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, 2016, as filed with the Securities and Exchange Commission on April 10, 2017. Principles of Consolidation The consolidated financial statements include the accounts of One Horizon Group, Inc. and its wholly owned subsidiaries Global Phone Credit Limited, One Horizon Hong Kong Limited and Horizon Network Technology Co. Ltd. (“HNT”). The accounts of the former subsidiaries, One Horizon Group plc, Horizon Globex GmbH, Abbey Technology GmbH and Horizon Globex Ireland Limited are included up to the date of Reorganization (Note 3). In addition, included in the consolidated financial statements as of and for the nine months ended September 30, 2017 and 2016, are the accounts of Suzhou Aishuo Network Information Co., Ltd. which is controlled by One Horizon Group, Inc. through various contractual arrangements. All significant intercompany balances and transactions have been eliminated. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Liquidity and Capital Resources As a result of the Reorganization in August 2017, more fully described in note 3, the Company will pursue its revised operations and business plan. The Company expects to incur further non cash losses in 2017 which, when combined with any costs incurred in pursuing acquisition of new businesses, may generate negative cash flows. As of September 30, 2017, the Company did not have any available credit facilities. As a result, it is in the process of seeking new financing by way of sale of either convertible debt or equities. While it has been successful in the past in obtaining the necessary capital to support its investment and operations, there is no assurance that it will be able to obtain additional financing under acceptable terms and conditions, or at all. In the event that the Company is unable to obtain sufficient additional funding when needed in order to fund operations, it would not be able to continue as a going concern and may be forced to severely curtail or cease operations and liquidate the Company. The condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or amounts of liabilities that might result from the outcome of these uncertainties. The Company’s current independent registered public accounting firm included a paragraph emphasizing this going concern uncertainty in their audit report regarding the Company’s 2016 financial statements dated April 10, 2017. 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 Hong Kong, , 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 Pursuant to the Reorganization the Company recognizes revenue from the sale of licenses of the digitally secure messaging on a invoice basis at September 30, 2017 the Company had collected all receivables on invoices raised to that date. Intangible Assets Intangible assets include software development costs and are amortized on a straight-line basis over the estimated useful lives of ten years for software development costs. The Company periodically evaluates whether changes have occurred that would require revision of the remaining estimated useful life. The Company performs periodic reviews of its capitalized intangible assets to determine if the assets have continuing value to the Company. Debt Issue Costs Debt issue costs related to long-term debt are capitalized and amortized over the term of the related debt using the effective interest method. Income Taxes Deferred income tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, operating loss, and tax credit carryforwards, and are measured using the enacted income tax rates and laws that will be in effect when the differences are expected to be recovered or settled. Realization of certain deferred income tax assets is dependent upon generating sufficient taxable income in the appropriate jurisdiction. The Company records a valuation allowance to reduce deferred income tax assets to amounts that are more likely than not to be realized. The initial recording and any subsequent changes to valuation allowances are based on a number of factors (positive and negative evidence). The Company considers its actual historical results to have a stronger weight than other, more subjective, indicators when considering whether to establish or reduce a valuation allowance. 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, result in penalties. 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 condensed 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, 2017 and 2016, outstanding stock options and warrants (totaling 494,000) 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. Accumulated Other Comprehensive Income (Loss) Other comprehensive income (loss), as defined, includes net loss, foreign currency translation adjustments, and all changes in equity (net assets) during a period from non-owner sources. To date, the Company has not had any significant transactions that are required to be reported in other comprehensive income (loss), except for foreign currency translation adjustments. 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. Stock based payments 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. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The adoption of ASU 2017-11, during the nine months ended September 30, 2017, did not have any impact on the condensed consolidated financial statements and related disclosures. |
Reorganization
Reorganization | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Reorganization | Note 3. Reorganization On August 11, 2017 (date of Reorganization), the Company consummated a Stock Purchase Agreement whereby its former Chief Executive Officer (“Former CEO”) acquired all of the outstanding capital stock of three of the Company’s subsidiaries, Abbey Technology GmbH, Horizon Globex GmbH and Horizon Globex Ireland Ltd., and approximately 99.7% of the outstanding shares in One Horizon Group plc (collectively the “Discontinued Entities”) from the Company in exchange for the forgiveness of $1,968,253 due by the Company to the Former CEO. In connection with the transaction, the Former CEO (See note 5) and the Discontinued Entities released the Company and its remaining subsidiaries (the “Excluded Entities”) from any claims outstanding as of the date of the transaction and the Company and the Excluded Entities released the Discontinued Entities from any outstanding claims. In contemplation of the Stock Purchase Agreement, certain intellectual property was transferred among the Discontinued Entities and the Excluded Entities such that each could continue the business contemplated to be carried on after the transaction was consummated. The Company’s condensed consolidated balance sheet as at December 31, 2016 has been adjusted to properly account for the current and noncurrent assets, current and noncurrent liabilities of discontinued operations separate from the current and noncurrent assets and current and noncurrent liabilities of the Excluded Entities. Adjustments to December 31, 2016 Balance Sheet for Discontinued operations Current assets of discontinued operations Cash $ 153 Accounts receivable, net 1,206 Other assets 337 $ 1,696 Noncurrent assets of discontinued operations Property and equipment (net) $ 26 Intangible assets, net 2,222 Investment 17 $ 2,265 Current liabilities of discontinued operations Accounts payable $ 187 Accrued expenses 18 Accrued compensation 5 Income taxes 90 $ 300 Long-term liabilities of discontinued operations Deferred income taxes $ 172 Mandatorily redeemable shares 62 $ 234 Loss from Discontinued Operations The Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2017 include operations of the Discontinued Entities up to the date of the Reorganization in Loss from Discontinued Operations. The Company’s condensed consolidated balance sheets, statements of operations for the three and nine months ended September 30, 2016 and statements of cash flows for the nine months ended September 30, 2016 have been adjusted to properly account for the discontinued operations as follows: (in thousands) Three Months ended September 30, Nine Months ended September 30, 2017 2016 2017 2016 Revenue $ 5 $ 286 $ 443 $ 1,230 Cost of Revenue Hardware — 5 5 55 Amortization 39 491 1,007 1,450 39 496 1,012 1,505 Gross Margin (34 ) (210 ) (569 ) (275 ) Expenses General and administrative 159 540 998 1,393 Depreciation 1 8 5 24 Research and development — 51 255 425 160 599 1,258 1,842 Other income (loss) — (1 ) — 6 Impairment Loss (50 ) — (622 ) — Income Taxes — 11 21 32 Loss from Discontinued Operations $ (244 ) $ (799 ) $ (2,428 ) $ (2,079 ) |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 4. Intangible Assets Intangible assets consist primarily of software development costs which are amortized over the estimated useful life, generally on a straight-line basis (in thousands) September 30 December 31 2017 2016 Horizon secure messaging software $ 6,517 $ 6,498 Less accumulated amortization (772 ) (308 ) Intangible assets, net $ 5,745 $ 6,190 Amortization of intangible assets for each of the next four years is estimated to be approximately $1,500,000 per year |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Note 5. Related-Party Transactions During the nine months ended September 30, 2017, $1,968,253 due to the Former CEO, Brian C Collins was forgiven in the reorganization whereby he acquired ownership of the Discontinued Entities (Note 3). After an impairments charge of $572,000 incurred in the three months to June 30, 2017 the net assets disposed of was equal to the amount due to the former CEO. During the nine months ended September 30, 2017 $662,048 due to the Chief Financial Officer was converted at the prevailing market price of $0.77 to 859,802 shares of common stock. |
Convertible Debentures
Convertible Debentures | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Debentures | Note 6. Convertible Debentures. In the three months ended September 30, 2017 the Company signed a convertible debenture in the amount of $100,000 to an individual repayable in July 2018 with interest at 10% per year and convertible into common stock at $0.60 at the holders option. |
Share Capital
Share Capital | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Share Capital | Note 7. Share Capital Preferred Stock The Company’s authorized capital includes 50,000,000 shares of preferred stock of $0.0001 par value. The designation of rights including voting powers, preferences, and restrictions shall be determined by the Board of Directors before the issuance of any shares. During the nine months ended September 30, 2017, pursuant to an agreement between the Company and the holders of the Series A preferred stock, the stock was re-designated as Series A-1 Preferred Stock, outstanding shares increased to 555,555 shares with a redemption price of $1.80, dividends of 10% per annum and the redemption date extended to February 1, 2018. Common Stock The Company is authorized to issue 33.3 million shares of common stock, par value of $0.0001, after giving effect to the, one new share for every six old shares, reverse stock split which was approved by the stock holders on April 19, 2017. During the nine months ended September 30, 2017 the Company: ● Issued 91,667 shares of common stock for services provided with a fair value of $176,055. ● Issued 127,366 shares of common stock for exercise of warrants at a price of $0.80 per share ● Issued 417,461 shares of common stock for cash proceeds of $265,000 ● Issued 859,802 shares of common stock for settlement of related party loan in the amount of $662,048 ● Issued 3,000,000 shares of common stock for employment commencement of 5 year employment contracts for executives with a fair value of $2,750,000. ● Issued 55,556 shares of common stock for exercise of warrants at a price of $0.80 per shares ● Issued 37,500 shares of common stock for settlement of amount owing of $30,000 Stock Purchase Warrants At September 30, 2017, the Company had reserved 578,014 shares of its common stock for the outstanding warrants with weighted average exercise price of $17.98. Such warrants expire at various times up to December 2019 and had no intrinsic value as at September 30, 2017. During the nine months ended September 30, 2017, 238,095 warrants were forfeited, 349,095 warrants were issued, for services performed and valued under the Black-Scholes valuation method, and 182,922 warrants were exercised. The assumptions used in calculating the fair value under the Black-Scholes option valuation model for warrants issued by the Company during the nine months ended September 30, 2017: Common stock fair value $ 1.92 Risk-free interest rate 2.5 % Expected dividend yield 0 % Expected warrant life (years) 0.5 Expected stock volatility 107 % Stock 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, 2017. A summary of the 2013 Plan options for the nine months ended September 30, 2017, is as follows: Number of Weighted Average Options Exercise Price Outstanding at January 1, 2017 141,250 $ 14.83 Forfeited (32,200 ) 22.61 Outstanding at September 30, 2017 109,050 18.71 As at September 30, 2017 there was unrecognized compensation expense of approximately $86,000 to be recognized over the remaining vesting periods. At September 30, 2017, 109,050 shares of common stock were reserved for all outstanding options and future commitments under the 2013 Equity Incentive Plan. Prior to the 2013 Plan the Company issued stock options to employees. A summary of the Company’s other stock options for the nine months ended September 30, 2017, is as follows: Number of Weighted Average Options Exercise Price Outstanding at January 1, 2017 and September 30, 2017 145,950 $ 3.18 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 8. Segment Information Subsequent to the reorganization set out in note 3, the Company has one business segments in the digital secure messaging in the gaming, security and educational fields.. All the revenue from continuing operations was generated in the Asia region. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9. Subsequent Events In October 2017 the Company has entered into agreements with the holder of the $3,500,000 principal amount of convertible debentures currently outstanding (the “Debentures”) and the holder of the 555,555 outstanding shares of its Series A-1 Preferred Stock (the “Preferred Shares”) pursuant to which it agreed to issue (the “Debenture Exchange”) to the holder of the Debentures upon conversion of $3,000,000 principal amount of the Debentures together with all interest accrued thereon, 13,000,000 shares of common stock, and, upon cancellation of the remaining balance due on the Debenture a $500,000 promissory note bearing interest at the rate of 7% per annum payable August 31, 2019 (the “7% Note”) and agreed to issue to the holder of the Preferred Shares, in exchange for the Preferred Shares (the “Preferred Exchange”), and the accrued but unpaid dividends thereon, 4,000,000 shares of common stock, together with a $500,000 promissory note bearing interest at the rate of 7% per annum. In September 2017 the Company agreed to issue 1,600,000 shares of its common stock to Mark White as an inducement to his employment as our President and Chief Executive Officer (the “Inducement Grant”), Consummation of each of the Debenture Exchange and the Preferred Exchange, and the issuance of the Inducement Grant requires approval of the Company’s stockholders under applicable rules of the NASDAQ Capital Market (“NASDAQ”), since each transaction involves the issuance of in excess of 20% of its outstanding shares of common stock. On October 3, 2017, the Company distributed an Information Statement to its stockholders noting that the Exchange Transactions were approved by written consent of the holders of a majority of its outstanding shares. However, the staff of NASDAQ questioned whether under NASDAQ’s corporate governance rules the Inducement Grant should be combined with the Preferred Exchange and thus those shares could only be issued after stockholder approval. If that is the case, the 1,600,000 shares could not be voted until the combined transaction is so approved and those shares should not have been included in the stockholder consent which approved the Exchange Transactions. Rather than dispute the issue raised by the Staff of NASDAQ, the Company obtained the written consent of a majority of our stockholders, without giving effect to the 1,600,000 inducement shares to be issued to Mark White. On November 6, 2017, the Company distributed an Information Statement to its stockholders noting that the Exchange Transactions and Inducement Grant were approved by written consent of the holders of a majority of its outstanding shares without giving effect to the shares granted to Mr. White as a result of the Inducement Grant. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Liquidity and Capital Resources | Liquidity and Capital Resources As a result of the Reorganization in August 2017, more fully described in note 3, the Company will pursue its revised operations and business plan. The Company expects to incur further non cash losses in 2017 which, when combined with any costs incurred in pursuing acquisition of new businesses, may generate negative cash flows. As of September 30, 2017, the Company did not have any available credit facilities. As a result, it is in the process of seeking new financing by way of sale of either convertible debt or equities. While it has been successful in the past in obtaining the necessary capital to support its investment and operations, there is no assurance that it will be able to obtain additional financing under acceptable terms and conditions, or at all. In the event that the Company is unable to obtain sufficient additional funding when needed in order to fund operations, it would not be able to continue as a going concern and may be forced to severely curtail or cease operations and liquidate the Company. The condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or amounts of liabilities that might result from the outcome of these uncertainties. The Company’s current independent registered public accounting firm included a paragraph emphasizing this going concern uncertainty in their audit report regarding the Company’s 2016 financial statements dated April 10, 2017. |
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 Hong Kong, , 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 | Accounts receivable Pursuant to the Reorganization the Company recognizes revenue from the sale of licenses of the digitally secure messaging on a invoice basis, at September 30, 2017 the Company had collected all receivables on invoices raised to that date. |
Intangible Assets | Intangible Assets Intangible assets include software development costs and are amortized on a straight-line basis over the estimated useful lives of ten years for software development costs. The Company periodically evaluates whether changes have occurred that would require revision of the remaining estimated useful life. The Company performs periodic reviews of its capitalized intangible assets to determine if the assets have continuing value to the Company. |
Debt Issue Costs | Debt Issue Costs Debt issue costs related to long-term debt are capitalized and amortized over the term of the related debt using the effective interest method. |
Income Taxes | Income Taxes Deferred income tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities, operating loss, and tax credit carryforwards, and are measured using the enacted income tax rates and laws that will be in effect when the differences are expected to be recovered or settled. Realization of certain deferred income tax assets is dependent upon generating sufficient taxable income in the appropriate jurisdiction. The Company records a valuation allowance to reduce deferred income tax assets to amounts that are more likely than not to be realized. The initial recording and any subsequent changes to valuation allowances are based on a number of factors (positive and negative evidence). The Company considers its actual historical results to have a stronger weight than other, more subjective, indicators when considering whether to establish or reduce a valuation allowance. 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, result in penalties. 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 condensed 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, 2017 and 2016, outstanding stock options and warrants (totaling 494,000) 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. |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) Other comprehensive income (loss), as defined, includes net loss, foreign currency translation adjustments, and all changes in equity (net assets) during a period from non-owner sources. To date, the Company has not had any significant transactions that are required to be reported in other comprehensive income (loss), except for foreign currency translation adjustments. |
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. |
Stock based payments | Stock based payments 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. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of this update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable non-controlling interests. The amendments in Part II of this update do not have an accounting effect. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The adoption of ASU 2017-11, during the nine months ended September 30, 2017, did not have any impact on the condensed consolidated financial statements and related disclosures. |
Reorganization (Tables)
Reorganization (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of current and noncurrent assets, current and noncurrent liabilities of discontinued operations | The Company’s condensed consolidated balance sheet as at December 31, 2016 has been adjusted to properly account for the current and noncurrent assets, current and noncurrent liabilities of discontinued operations separate from the current and noncurrent assets and current and noncurrent liabilities of the Excluded Entities. Adjustments to December 31, 2016 Balance Sheet for Discontinued operations Current assets of discontinued operations Cash $ 153 Accounts receivable, net 1,206 Other assets 337 $ 1,696 Noncurrent assets of discontinued operations Property and equipment (net) $ 26 Intangible assets, net 2,222 Investment 17 $ 2,265 Current liabilities of discontinued operations Accounts payable $ 187 Accrued expenses 18 Accrued compensation 5 Income taxes 90 $ 300 Long-term liabilities of discontinued operations Deferred income taxes $ 172 Mandatorily redeemable shares 62 $ 234 |
Schedule of reorganization in loss from discontinued operations | The Company’s condensed consolidated statements of operations for the three and nine months ended September 30, 2017 include operations of the Discontinued Entities up to the date of the Reorganization in Loss from Discontinued Operations. The Company’s condensed consolidated balance sheets, statements of operations for the three and nine months ended September 30, 2016 and statements of cash flows for the nine months ended September 30, 2016 have been adjusted to properly account for the discontinued operations as follows: (in thousands) Three Months ended September 30, Nine Months ended September 30, 2017 2016 2017 2016 Revenue $ 5 $ 286 $ 443 $ 1,230 Cost of Revenue Hardware — 5 5 55 Amortization 39 491 1,007 1,450 39 496 1,012 1,505 Gross Margin (34 ) (210 ) (569 ) (275 ) Expenses General and administrative 159 540 998 1,393 Depreciation 1 8 5 24 Research and development — 51 255 425 160 599 1,258 1,842 Other income (loss) — (1 ) — 6 Impairment Loss (50 ) — (622 ) — Income Taxes — 11 21 32 Loss from Discontinued Operations $ (244 ) $ (799 ) $ (2,428 ) $ (2,079 ) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consist primarily of software development costs which are amortized over the estimated useful life, generally on a straight-line basis (in thousands) September 30 December 31 2017 2016 Horizon secure messaging software $ 6,517 $ 6,498 Less accumulated amortization (772 ) (308 ) Intangible assets, net $ 5,745 $ 6,190 |
Share Capital (Tables)
Share Capital (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of black-scholes option valuation model for warrant issued | The assumptions used in calculating the fair value under the Black-Scholes option valuation model for warrants issued by the Company during the nine months ended September 30, 2017: Common stock fair value $ 1.92 Risk-free interest rate 2.5 % Expected dividend yield 0 % Expected warrant life (years) 0.5 Expected stock volatility 107 % |
Schedule of equity incentive plan | A summary of the 2013 Plan options for the nine months ended September 30, 2017, is as follows: Number of Weighted Average Options Exercise Price Outstanding at January 1, 2017 141,250 $ 14.83 Forfeited (32,200 ) 22.61 Outstanding at September 30, 2017 109,050 18.71 |
Schedule of other stock options | A summary of the Company’s other stock options for the nine months ended September 30, 2017, is as follows: Number of Weighted Average Options Exercise Price Outstanding at January 1, 2017 and September 30, 2017 145,950 $ 3.18 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Details Narrative) | 9 Months Ended |
Sep. 30, 2017shares | |
Antidilutive securities | 494,000 |
Software Development [Member] | |
Useful life of intangible assets | 10 years |
Reorganization (Details)
Reorganization (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets of discontinued operations | ||
Cash | $ 153 | |
Accounts receivable, net | 1,206 | |
Other assets | 337 | |
Total | 1,696 | |
Noncurrent assets of discontinued operations | ||
Property and equipment (net) | 26 | |
Intangible assets, net | 2,222 | |
Investment | 17 | |
Total | 2,265 | |
Current liabilities of discontinued operations | ||
Accounts payable | 187 | |
Accrued expenses | 18 | |
Accrued compensation | 5 | |
Income taxes | 90 | |
Total | 300 | |
Long-term liabilities of discontinued operations | ||
Deferred income taxes | 172 | |
Mandatorily redeemable shares | 62 | |
Total | $ 234 |
Reorganization (Details 1)
Reorganization (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Revenue | $ 5 | $ 286 | $ 443 | $ 1,230 |
Cost of Revenue | ||||
Hardware | 5 | 5 | 55 | |
Amortization | 39 | 491 | 1,007 | 1,450 |
Total | (39) | (496) | (1,012) | (1,505) |
Gross Profit | (34) | (210) | (569) | (275) |
Expenses | ||||
General and administrative | 159 | 540 | 998 | 1,393 |
Depreciation | 1 | 8 | 5 | 24 |
Research and development | 51 | 255 | 425 | |
Total | 160 | 599 | 1,258 | 1,842 |
Other income (loss) | (1) | 6 | ||
Impairment Loss | (50) | (622) | ||
Income Taxes | 11 | 21 | 32 | |
Loss from Discontinued Operations | $ (244) | $ (799) | $ (2,428) | $ (2,079) |
Reorganization (Details Narrati
Reorganization (Details Narrative) - Brian C Collins [Member] | Sep. 30, 2017USD ($) |
Due from related party | $ 1,968,253 |
Percentage of outstanding capital stock | 99.70% |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Intangible assets, net | $ 5,745 | $ 6,190 |
Horizon Software [Member] | ||
Intangible assets, gross | 6,517 | 6,498 |
Less accumulated amortization | (772) | (308) |
Intangible assets, net | $ 5,745 | $ 6,190 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Amortization of intangible assets | $ 405 | $ 22 | $ 449 | $ 68 |
Horizon Software [Member] | ||||
Amortization of intangible assets | $ 1,500 |
Related-Party Transactions (Det
Related-Party Transactions (Details Narrative) | 3 Months Ended |
Sep. 30, 2017USD ($)$ / shares | |
Martin Ward [Member] | |
Related Party Transaction [Line Items] | |
Due from related party | $ 662,048 |
Market price (in dollars per share) | $ / shares | $ 0.77 |
Converted related party debt was common stock | $ 859,802 |
Brian C Collins [Member] | |
Related Party Transaction [Line Items] | |
Due from related party | 1,968,253 |
Impairments charge | $ 572,000 |
Convertible Debentures (Details
Convertible Debentures (Details Narrative) - 10% Convertible Debentures Due On July 2018 [Member] | Sep. 30, 2017USD ($)$ / shares |
Debt amount | $ | $ 100,000 |
Interest rate | 10.00% |
Conversion price | $ / shares | $ 0.60 |
Share Capital (Details)
Share Capital (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Stockholders' Equity Note [Abstract] | ||
Common stock fair value | $ 1.92 | $ 1.92 |
Risk-free interest rate | 2.50% | 2.50% |
Expected dividend yield | 0.00% | 0.00% |
Expected warrant life (years) | 6 months | 6 months |
Expected stock volatility | 107.00% | 107.00% |
Share Capital (Details 1)
Share Capital (Details 1) - 2013 Equity Incentive Plan [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning | shares | 141,250 |
Forfeited | shares | (32,200) |
Outstanding at ending | shares | 109,050 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ / shares | $ 14.83 |
Forfeited | $ / shares | 22.61 |
Outstanding at ending | $ / shares | $ 18.71 |
Share Capital (Details 2)
Share Capital (Details 2) - Other Stock Options [Member] | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning | shares | 145,950 |
Options issued | shares | |
Outstanding at ending | shares | 145,950 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ / shares | $ 3.18 |
Options issued | $ / shares | |
Outstanding at ending | $ / shares | $ 3.18 |
Share Capital (Details Narrativ
Share Capital (Details Narrative) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Preferred stock, authorized | 50,000,000 | 50,000,000 | |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, issued | 555,555 | 170,940 | |
Preferred stock, outstanding | 555,555 | 170,940 | |
Common stock, authorized | 33,333,333 | 33,333,333 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Warrant issued | 127,366 | ||
Warrant issued | 55,556 | ||
Redemption price | $ 1.80 | ||
Exercise price of warrant issued (in dollars per share) | 0.80 | ||
Exercise price (in dollars per share) | $ 0.80 | ||
Number of shares issued | 417,461 | ||
Proceeds from issuance of stock | $ 265,000 | $ 125,000 | |
Number of shares issued settlement of related party loan | 859,802 | ||
Amount of settlement of related party loan | $ 662,048 | ||
Number of shares issued settlement of loan | 37,500 | ||
Amount of settlement of loan | $ 30,000 | ||
Number of shares issued for services | 91,667 | ||
Fair value issued for services | $ 176,055 | ||
Number of shares issued common stock for employment commencement services | 3,000,000 | ||
Fair value issued for common stock for employment commencement services | $ 2,750,000 | ||
Share price (in dollars per share) | $ 0.0001 | ||
Description of reverse stock split | Six-to-one | ||
2013 Equity Incentive Plan [Member] | |||
Unrecognized compensation expense | $ 86,000 | ||
Number of common stock reserved for future issuance | 109,050 | ||
Warrant [Member] | |||
Exercise price (in dollars per share) | $ 17.98 | ||
Number of shares issued | 349,095 | ||
Number of common shares reserved for outstanding warrants | 578,014 | ||
Warrants exercised | 182,922 | ||
Number of warrants forfeited | 238,095 | ||
Series A Preferred Stock [Member] | |||
Preferred stock, outstanding | 555,555 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) $ in Thousands | Oct. 02, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Preferred stock outstanding | 555,555 | 170,940 | |
Number of shares issued | 91,667 | ||
Series A Preferred Stock [Member] | |||
Preferred stock outstanding | 555,555 | ||
Subsequent Event [Member] | Shareholder [Member] | Series A Preferred Stock [Member] | |||
Preferred stock outstanding | 555,555 | ||
Number of shares issued upon accrued but unpaid dividends | 4,000,000 | ||
Subsequent Event [Member] | Shareholder [Member] | Convertible Debentures [Member] | |||
Principal amount outstanding | $ 3,500 | ||
Debt original converted amount | $ 3,500 | ||
Number of common shares issued upon debt conversion | 13,000,000 | ||
Subsequent Event [Member] | Shareholder [Member] | 7% Promissory Note Due August 31, 2019 [Member] | |||
Principal amount | $ 500,000 | ||
Subsequent Event [Member] | Mr. Mark White [Member] | |||
Number of shares issued | 1,600,000 |