Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 08, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | RESEARCH FRONTIERS INC | |
Entity Central Index Key | 793,524 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 27,662,211 | |
Trading Symbol | REFR | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 3,400,842 | $ 1,737,847 |
Royalties receivable, net of reserves of $1,051,424 in 2018 and 2017 | 709,811 | 597,441 |
Prepaid expenses and other current assets | 96,790 | 29,697 |
Total current assets | 4,207,443 | 2,364,985 |
Fixed assets, net | 358,456 | 482,561 |
Deposits and other assets | 33,567 | 33,567 |
Total assets | 4,599,466 | 2,881,113 |
Current liabilities: | ||
Accounts payable | 56,602 | 58,090 |
Accrued expenses and other | 263,420 | 254,833 |
Deferred revenue | 38,966 | 824 |
Total current liabilities | 358,988 | 313,747 |
Warrant liability | 510,001 | |
Shareholders' equity: | ||
Common stock, par value $0.0001 per share; authorized 100,000,000 shares, issued and outstanding 27,662,211 in 2018 and 24,043,846 in 2017 | 2,766 | 2,404 |
Additional paid-in capital | 114,784,477 | 111,627,789 |
Accumulated deficit | (111,056,766) | (109,062,827) |
Total shareholders' equity | 3,730,477 | 2,567,366 |
Total liabilities and shareholders' equity | $ 4,599,466 | $ 2,881,113 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Royalties receivables, reserves | $ 1,051,424 | $ 1,051,424 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 27,662,211 | 24,043,846 |
Common stock, shares outstanding | 27,662,211 | 24,043,846 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Fee income | $ 359,725 | $ 488,336 | $ 1,117,849 | $ 1,229,631 |
Operating expenses | 572,968 | 607,291 | 2,228,757 | 2,380,328 |
Research and development | 190,647 | 185,296 | 660,086 | 598,638 |
Total Expenses | 763,615 | 792,587 | 2,888,843 | 2,978,966 |
Operating loss | (403,890) | (304,251) | (1,770,994) | (1,749,335) |
Net investment income | 2,220 | 1,113 | 5,665 | 3,830 |
Warrant market adjustment | (286,631) | (286,631) | ||
Net loss | $ (688,301) | $ (303,138) | $ (2,051,960) | $ (1,745,505) |
Basic and diluted net loss per common share | $ (0.03) | $ (0.01) | $ (0.08) | $ (0.07) |
Weighted average number of common shares outstanding | 26,002,263 | 24,043,846 | 25,380,466 | 24,043,846 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (2,051,960) | $ (1,745,505) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 135,400 | 131,725 |
Warrant market adjustment | 286,631 | |
Stock based compensation | 69,309 | |
Bad debts | (1,785) | |
Change in assets and liabilities: | ||
Royalty receivables | (54,350) | 336,739 |
Prepaid expenses and other current assets | (67,093) | 205,825 |
Accounts payable and accrued expenses | 7,099 | 46,666 |
Deferred revenue | 38,142 | 5,815 |
Net cash used in operating activities | (1,636,821) | (1,020,520) |
Cash flows from investing activities: | ||
Purchases of fixed assets | (11,295) | (6,362) |
Proceeds from sale of investment | 1,523,333 | |
Net cash provided by (used in) investing activities | (11,295) | 1,516,971 |
Cash flows from financing activities: | ||
Proceeds for issuance of common stock and warrants | 3,026,630 | |
Proceeds for issuance of common stock and warrants | 223,370 | |
Proceeds from exercise of warrants | 61,111 | |
Net cash provided by financing activities | 3,311,111 | |
Net increase in cash and cash equivalents | 1,662,995 | 496,451 |
Cash and cash equivalents at beginning of period | 1,737,847 | 1,691,603 |
Cash and cash equivalents at end of period | $ 3,400,842 | $ 2,188,054 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report on Form 10-K relating to Research Frontiers Incorporated (the “Company”) for the fiscal year ended December 31, 2017. |
Business
Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Note 2. Business Research Frontiers Incorporated (“Research Frontiers” or the “Company”) operates in a single business segment which is engaged in the development and marketing of technology and devices to control the flow of light. Such devices, often referred to as “light valves” or suspended particle devices (SPDs), use colloidal particles that are either incorporated within a liquid suspension or a film, which is usually enclosed between two sheets of glass or plastic having transparent, electrically conductive coatings on the facing surfaces thereof. At least one of the two sheets is transparent. SPD technology, made possible by a flexible light-control film invented by Research Frontiers, allows the user to instantly and precisely control the shading of glass/plastic manually or automatically. SPD technology has numerous product applications, including: SPD-Smart™ windows, sunshades, skylights and interior partitions for homes and buildings; automotive windows; sunroofs, sun-visors, sunshades, rear-view mirrors, instrument panels and navigation systems; aircraft windows; train windows, eyewear products; and flat panel displays for electronic products. SPD-Smart light control film is now being developed for, or used in, architectural, automotive, marine, aerospace and appliance applications. The Company has historically utilized its cash and cash equivalents and the proceeds from the sale of its investments to fund its research and development of SPD light valves, for marketing initiatives, and for other working capital purposes. The Company’s working capital and capital requirements depend upon numerous factors, including the results of research and development activities, competitive and technological developments, the timing and cost of patent filings, and the development of new licensees and changes in the Company’s relationships with its existing licensees. The degree of dependence of the Company’s working capital requirements on each of the forgoing factors cannot be quantified; increased research and development activities and related costs would increase such requirements; the addition of new licensees may provide additional working capital or working capital requirements, and changes in relationships with existing licensees would have a favorable or negative impact depending on the nature of such changes. Eventual success of the Company and generation of positive cash flow will be dependent upon the commercialization of products using the Company’s technology by the Company’s licensees and payments of continuing royalties on account thereof. To date, the Company has not generated sufficient revenue from its licensees to fund its operations. As of September 30, 2018, the Company had cash and cash equivalents of $3,400,842, working capital (total current assets less total current liabilities) of $3,848,455 and total shareholders’ equity of $3,730,477. During the first nine months of 2018, the Company received approximately $3.3 million in proceeds from the sale of common stock, warrants and the exercise of outstanding warrants to purchase the Company’s common stock (please see Note 8 for additional details of this transaction). The Company expects as of this filing to have sufficient working capital for at least the next 18-24 months of operations. |
Patent Costs
Patent Costs | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patent Costs | Note 3. Patent Costs The Company expenses costs relating to the development, acquisition or enforcement of patents due to the uncertainty of the recoverability of these items. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue Recognition | Note 4. Revenue Recognition In May 2014, the FASB issued guidance on revenue recognition (ASC 606). The standard provides a single comprehensive revenue recognition model for all contracts with customers and supersedes existing revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services. This new ASC 606 guidance was adopted by the Company beginning January 1, 2018. ASC 606 was applied using the modified retrospective method, with the cumulative effect of the initial adoption being recognized as an adjustment to opening retained earnings at January 1, 2018. The comparative prior periods have not been adjusted and continue to be reported under FASB ASC Topic 605, Revenue Recognition (“ASC 605”). The Company’s policy relating to revenue under ASC 605 is described in Note 2(e) of the Company’s Form 10-K for the year ended December 31, 2017. The policies described herein refer to those in effect as of January 1, 2018. ASC 606 follows a five-step approach to determining revenue recognition including: 1) Identification of the contract; 2) Identification of the performance obligations; 3) Determination of the transaction price; 4) Allocation of the transaction price and 5) Recognition of revenue. The Company determined that its license agreements provide for three performance obligations which include: (i) the Grant of Use to its Patent Portfolio “Grant of Use”, (ii) Stand-Ready Technical Support (“Technical Support”) including the transfer of trade secrets and other know-how, production of materials, scale-up support, analytical testing, etc., and (iii) access to new Intellectual Property (“IP”) that may be developed sometime during the course of the contract period (“New Improvements”). Given the nature of IP development, such New Improvements are on an unspecified basis and can occur and be made available to licensees at any time during the contract period. When a contract includes more than one performance obligation, the Company needs to allocate the total consideration to each performance obligation based on its relative standalone selling price or estimate the standalone selling price if it is not observable. A standalone selling price is not available for our performance obligations since we do not sell any of the services separately and there is no competitor pricing that is available. As a consequence, the best method for determining standalone selling price of our Grant of Use performance obligation is through a comparison of the average royalty rate for comparable license agreements as compared to our license agreements. Comparable license agreements must consider several factors including: (i) the materials that are being licensed, (ii) the market application for the licensed materials, and (iii) the financial terms in the license agreements that can increase or decrease the risk/reward nature of the agreement. Based on the royalty rate comparison referred to above, any pricing above and beyond the average royalty rate would relate to the Technical Support and New Improvements performance obligations. The Company focuses a significant portion of its time and resources to provide the Technical Support and New Improvements services to its licensees which further supports the conclusions reached using the royalty rate analysis. The Technical Support and New Improvements performance obligations are co-terminus over the term of the license agreement. For purposes of determining the transaction price, and recognizing revenue, the Company combined the Technical Support and New Improvements performance obligations because they have the same pattern of transfer and the same term. We maintain a staff of scientists and other professionals whose primary job responsibilities throughout the year are: (i) being available to respond to Technical Support needs of our licensees, and (ii) developing improvements to our technology which are offered to our licensees as New Improvements. Since the costs incurred to satisfy the Technical Support and New Improvements performance obligations are incurred evenly throughout the year, the value of the Technical Support and New Improvements services are recognized throughout the initial contract period as these performance obligations are satisfied. If the agreement is not terminated at the end of the initial contract period, it will renew on the same terms as the initial contract for a one-year period. Consequently, any fees or minimum annual royalty obligations relating to this renewal contract will be allocated similarly to the initial contract over the additional one-year period. We recognize revenue when or as the performance obligations in the contract are satisfied. For performance obligations that are fulfilled at a point in time, revenue is recognized at the fulfillment of the performance obligation. Since the IP is determined to be a functional license, the value of the Grant of Use is recognized in the first period of the contract term in which the license agreement is in force. The value of the Technical Support and New Improvements obligations is allocated throughout the contract period based on the satisfaction of its performance obligations. If the agreement is not terminated at the end of the contract period, it will renew on the same terms as the original agreement for a one-year period. Consequently, any fees or minimum annual royalties (“MAR”) relating to this renewal contract will be allocated similarly over that additional year. The Company’s license agreements have a variable royalty fee structure (meaning that royalties are a fixed percentage of sales that vary from period to period) and frequently include a minimum annual royalty commitment. In instances when sales of licensed products by its licensees exceed the MAR, the Company recognizes fee income as the amounts have been earned. Typically, the royalty rate for such sales is 10-15% of the selling price. While this is variable consideration, it is subject to the sales/usage royalty exception to recognition of variable consideration in ASC 606 10-55-65 and therefore is not recognized until the subsequent sales or usage occurs or the MAR period commences. Because of the immediate recognition of the Grant of Use performance obligation: (i) the first period of the contract term will generally have a higher percent allocation of the transaction price under ASC 606 than under the accounting guidance used prior to the adoption of ASC 606, and (ii) the remaining periods in the year will have less of the transaction price recognized under ASC 606 than under the accounting guidance used prior to the adoption of ASC 606. After the initial period in the contract term, the revenue for the remaining periods will be based on the satisfaction of the technical support and New Improvements obligations. Since most of our license agreements start as of January 1st, the revenue recognized for the contract under ASC 606 in our first quarter will tend to be higher than the accounting guidance used prior to the adoption of ASC 606. In the third quarter of 2018, the Company reported $74,352 lower revenue under ASC 606 as compared to the accounting guidance used prior to the adoption of ASC 606. In the first nine months of 2018, the Company reported $69,900 lower revenue under ASC 606 as compared to the accounting guidance used prior to the adoption of ASC 606 due to the impact of: (i) the Grant of Use portion of multiyear license agreements being recognized only in the first year of the agreement, and (ii) the initial fee of license agreements being amortized over the entire contract period instead of being recognized completely during the period when the agreement was executed. ASC 606 was applied using the modified retrospective method to all contracts that were not completed contracts as of the implementation date, with the cumulative effect of the initial adoption being recognized as an adjustment to opening retained earnings at January 1, 2018. As of January 1, 2018, we had four license agreements that were still under their multi-year initial term. The Company elected to use the Modified Retrospective approach when adopting the provisions of ASC 606. Using the Modified Retrospective Approach, with the adoption of ASC 606 as of January 1, 2018, the Company will not recognize $58,021 of revenue in future periods from these four license agreements that it would have recognized under ASC 605. The non-recognition of future revenues associated with the adoption of ASC 606 is solely from a financial reporting standpoint and does not impact the Company’s licensees’ obligations to pay royalties to the Company under their license agreements. The Company recorded a cumulative adjustment to decrease opening accumulated deficit and increase accounts receivable balance as of January 1, 2018 by $58,021. Royalties receivable balance, net - December 31, 2017 $ 597,441 Cumulative effect of adoption of ASC 606 58,021 Opening royalties receivable balance, net - January 1, 2018 $ 655,462 As of September 30, 2018, the net closing royalties receivable balance is $709,811. Had ASC 606 not been adopted, the Company’s net closing accounts receivable balance as of September 30, 2018 would have been $777,985. The Company does not have any contract assets under ASC 606 as of January 1, 2018 and September 30, 2018. There was $824 of revenue recognized during the nine months ended September 30, 2018 that was included in contract liability (deferred revenue) as of the beginning of the period and the balance of this account as of September 30, 2018 is $38,966. Had ASC 606 not been adopted, the Company’s deferred revenue balance as of September 30, 2018 would have been $46,267. Certain of the contract fees are accrued by, or paid to, the Company in advance of the period in which they are earned resulting in deferred revenue. Such excess amounts are recorded as deferred revenue and are recognized into income in future periods as earned. The Company operates in a single business segment which is engaged in the development and marketing of technology and devices to control the flow of light. Our revenue source comes from the licensing of this technology and all of these license agreements have similar terms and provisions. The majority of the Company’s licensing fee income comes from the activities of several licensees participating in the automotive market. The Company currently believes that the automotive market will be the largest source of its royalty income over the next several years. The Company’s royalty income from this market may be influenced by numerous factors including various trends affecting demand in the automotive industry and the rate of introduction of new technology in OEM product lines. In addition to these macro factors, the Company’s royalty income from the automotive market could also be influenced by specific factors such as whether the Company’s SPD-SmartGlass technology appears as standard equipment or as an option on a particular vehicle, the number of additional vehicle models that SPD-SmartGlass appears on, the size of each window on a vehicle and the number of windows on a vehicle that use SPD SmartGlass, fluctuations in the total number of vehicles produced by a manufacturer, and in the percentage of cars within each model produced with SPD-SmartGlass, and changes in pricing or exchange rates. As of September 30, 2018, the Company has six license agreements that are in their initial multiyear term (“Initial Term”) with continuing performance obligations going forward. The Initial Term of three of these agreements will end as of December 31, 2019, one will end as of December 31, 2020, one will end as of December 31, 2021, and one will end as of December 31, 2022. The Company currently expects that all six of these agreements will renew annually at the end of the Initial Term although no assurance can be provided that these contracts will renew at the end of the initial term. As of September 30, 2018, the aggregate amount of the revenue to be recognized upon the satisfaction of the remaining performance obligations for the six license agreements is $386,113. The revenue for these remaining performance obligations for each of the six license agreements is expected to be recognize evenly throughout their remaining period of the Initial Term. |
Fee Income
Fee Income | 9 Months Ended |
Sep. 30, 2018 | |
Fee Income | |
Fee Income | Note 5. Fee Income Fee income represents amounts earned by the Company under various license and other agreements relating to technology developed by the Company. During the first nine months of 2018, four licensees accounted for 10% or more of fee income of the Company; these licensees accounted for approximately 33%, 14%, 13% and 10%, respectively of fee income recognized during such period. During the first nine months of 2017, four licensees accounted for 10% or more of fee income of the Company; these licensees accounted for approximately 31%, 15%, 12% and 11%, respectively of fee income recognized during this period. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 6. Stock-Based Compensation The Company has granted options/warrants to consultants. GAAP requires that all stock-based compensation be recognized as an expense in the financial statements and that such costs be measured at the fair value of the award at the date of grant. These awards generally vest ratably over 12 to 60 months from the date of grant and the Company charges to operations quarterly the current market value of the options using the Black-Scholes method. During the three and nine months ended September 30, 2018 and 2017 there were no charges related to options granted to consultants. During the nine months ended September 30, 2018, . The Company did not grant any stock options to employees and directors during the three months ended September 30, 2018. September 30, 2018 Fair value on grant date $ 0.462 Expected Dividend yield - Expected volatility 51 % Risk free interest rate 2.77 % Expected term of the option 5 years The Company did not grant any stock options to employees and directors during the three and nine months ended September 30, 2017. There was no compensation expense recorded relating to restricted stock grants to employees and directors during the three and nine months ended September 30, 2018 and 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7. Income Taxes Since inception, the Company has incurred losses from operations and as a result has not recorded income tax expense. Benefits related to net operating loss carryforwards and other deferred tax items have been fully reserved since it was not more likely than not that the Company would achieve profitable operations and be able to utilize the benefit of the net operating loss carryforwards. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | Note 8. Equity On or around February 16, 2018, a small group of long-time shareholders of the Company who are accredited investors made an interest-free five-year convertible loan of $1.25 million to the Company which, upon the occurrence of certain conditions which have already occurred, automatically converted into 1,388,893 shares of common stock at a price equal to the market price of the Company’s common stock when the loan was made, plus warrants expiring February 28, 2023 to purchase 1,388,893 shares of common stock at an exercise price of $1.10, $1.20 or $1.35 per share depending on the exercise date. No payments are due on this note during its five-year term or after conversion into equity. On April 23, 2018, Research Frontiers Incorporated filed a prospectus supplement relating to the issuance and sale of the above common stock and warrant securities with the Securities and Exchange Commission. The Company has recorded this transaction as an equity transaction whereby the proceeds were accounted for as the issuance of the Company’s common stock on the date that the proceeds were received. On September 7, 2018, the Company announced that it had sold common stock to a group of investors led by Gauzy Ltd., a licensee of the Company’s SPD technology. The aggregate proceeds from these stock offerings was $2,000,000. The Company expects as of this filing to have sufficient working capital for at least the next 18-24 months of operations. At the closing, the investors received 2,173,916 shares of Research Frontiers common stock at a price of $0.92 per share, as well as five-year warrants to purchase 1,086,957 shares of Research Frontiers common stock at an exercise price of $1.10, $1.20 or $1.38 per share depending on the exercise date. In connection with the issuance of certain of these warrants during the third quarter of 2018, the Company allocated $223,370 as a warrant liability upon the issuance of these warrants on August 13, 2018 and recorded a non-cash accounting expense of $286,631 to mark these to their market value as of September 30, 2018. This resulted in a liability of $510,001 recorded on the Company’s September 30, 2018 balance sheet. In September 2018, the Company received proceeds of $61,111 and issued 55,556 shares of common stock in connection with the exercise of outstanding warrants. The Company did not sell any equity securities during the three and nine months ended September 30, 2017. |
Treasury Stock
Treasury Stock | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Treasury Stock | Note 9. Treasury Stock The Company did not repurchase any of its stock during the three and nine-month periods ended June 30, 2018 and 2017. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 10. Fair Value Measurements We value financial instruments using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices for similar assets or liabilities in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value of the warrant liability recorded in the current report is a Level 3 measurement. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of Cumulative Effect Adjustment to Increase Opening Accumulated Deficit and Accounts Receivable | Royalties receivable balance, net - December 31, 2017 $ 597,441 Cumulative effect of adoption of ASC 606 58,021 Opening royalties receivable balance, net - January 1, 2018 $ 655,462 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The Company valued these grants using the Black-Scholes option pricing model with the following assumptions: September 30, 2018 Fair value on grant date $ 0.462 Expected Dividend yield - Expected volatility 51 % Risk free interest rate 2.77 % Expected term of the option 5 years |
Business (Details Narrative)
Business (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 3,400,842 | $ 2,188,054 | $ 1,737,847 | $ 1,691,603 |
Working capital | 3,848,455 | |||
Shareholders' equity | 3,730,477 | $ 2,567,366 | ||
Proceeds from sale of common stock, warrants and exercise of outstanding warrants | $ 3,026,630 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) | Jan. 02, 2018 | Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Royalties receivable | $ 709,811 | $ 709,811 | $ 597,441 | |
Accounts receivable | $ 655,462 | 777,985 | 777,985 | 597,441 |
Recognition of deferred revenue | 824 | |||
Deferred revenue, current | 38,966 | 38,966 | $ 824 | |
Deferred revenue, ASC not adopted | 46,267 | 46,267 | ||
Remaining performance obligations | 386,113 | 386,113 | ||
ASC 606 [Member] | ||||
Unrecognized revenue | 58,021 | |||
RFI [Member] | ASC 606 [Member] | ||||
Revenue recognition | $ 74,352 | $ 69,900 | ||
Decrease opening accumulated deficit and increase accounts receivable | $ 58,021 | |||
Minimum [Member] | ||||
Royalty rate | 10.00% | |||
Maximum [Member] | ||||
Royalty rate | 15.00% |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Cumulative Effect Adjustment to Increase Opening Accumulated Deficit and Accounts Receivable (Details) | Jan. 02, 2018USD ($) |
Revenue Recognition and Deferred Revenue [Abstract] | |
Royalties receivable balance, net | $ 597,441 |
Cumulative effect of adoption of ASC 606 | 58,021 |
Opening royalties receivable balance, net | $ 655,462 |
Fee Income (Details Narrative)
Fee Income (Details Narrative) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Four Licensees [Member] | ||
Percentage of fee income | 10.00% | 10.00% |
Licensee One [Member] | ||
Percentage of fee income | 33.00% | 31.00% |
Licensee Two [Member] | ||
Percentage of fee income | 14.00% | 15.00% |
Licensee Three [Member] | ||
Percentage of fee income | 13.00% | 12.00% |
Licensee Four [Member] | ||
Percentage of fee income | 10.00% | 11.00% |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based compensation | $ 69,309 | |||
Employees [Member] | ||||
Number of fully vested options granted | 150,182 | |||
Employees and Directors [Member] | ||||
Number of fully vested options granted | ||||
Restricted Stock [Member] | Employees and Directors [Member] | ||||
Compensation cost | ||||
Minimum [Member] | ||||
Award vesting period | 12 months | |||
Maximum [Member] | ||||
Award vesting period | 60 months |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Fair value on grant date | $ 0.462 |
Expected Dividend yield | 0.00% |
Expected volatility | 51.00% |
Risk free interest rate | 2.77% |
Expected term of the option | 5 years |
Equity (Details Narrative)
Equity (Details Narrative) - USD ($) | Sep. 07, 2018 | Feb. 16, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Aug. 13, 2018 | Dec. 31, 2017 |
Loan period | 5 years | |||||||
Proceeds from loan | $ 1,250,000 | |||||||
Convertible loan converted into number of common shares | 1,388,893 | |||||||
Warrant expiry date | Feb. 28, 2023 | |||||||
Warrant to purchase shares of common stock | 1,388,893 | |||||||
Warrant exercise price, description | Exercise price of $1.10, $1.20 or $1.35 per share depending on the exercise date | |||||||
Warrant term | 5 years | |||||||
Warrant liability | $ 510,001 | $ 510,001 | $ 223,370 | |||||
Warrant market adjustment | $ 286,631 | 286,631 | ||||||
Proceeds from exercise of warrants | $ 61,111 | |||||||
Number of common shares issued in connection with exercise of outstanding warrants | 27,662,211 | 27,662,211 | 24,043,846 | |||||
Investors [Member] | SPD Technology [Member] | ||||||||
Warrant to purchase shares of common stock | 1,086,957 | |||||||
Warrant term | 5 years | |||||||
Equity method investment | $ 2,000,000 | |||||||
Number of common stock, shares received | 2,173,916 | |||||||
Shares issued price per share | $ 0.92 | |||||||
Warrant Exercise Price One [Member] | ||||||||
Warrant exercise price per share | $ 1.10 | |||||||
Warrant Exercise Price One [Member] | Investors [Member] | SPD Technology [Member] | ||||||||
Warrant exercise price per share | 1.10 | |||||||
Warrant Exercise Price Two [Member] | ||||||||
Warrant exercise price per share | 1.20 | |||||||
Warrant Exercise Price Two [Member] | Investors [Member] | SPD Technology [Member] | ||||||||
Warrant exercise price per share | 1.20 | |||||||
Warrant Exercise Price Three [Member] | ||||||||
Warrant exercise price per share | $ 1.35 | |||||||
Warrant Exercise Price Three [Member] | Investors [Member] | SPD Technology [Member] | ||||||||
Warrant exercise price per share | $ 1.38 | |||||||
Warrant [Member] | ||||||||
Number of common shares issued in connection with exercise of outstanding warrants | 55,556 | 55,556 |